PayPal Founder Tests Rocket That May Haul NASA's Space Cargo

Elon Musk changed the way people shop on the Internet when he helped start the online-payment service PayPal. Tomorrow, he will try to take a step toward changing the way NASA carries supplies and people into space.

Musk’s Hawthorne, California-based Space Exploration Technologies Corp. is scheduled to launch its Falcon 9 on an initial test flight from Cape Canaveral, Florida, during a four- hour window that begins at 11 a.m. The company plans to use the rocket to carry into Earth orbit its Dragon spacecraft, which is intended to take cargo to the International Space Station after the space shuttles are retired and may later ferry astronauts.

“If it is successful, it is an important initial step toward the creation of a new kind of industry,” said John Logsdon, founder of the Space Policy Institute at George Washington University in Washington.

SpaceX’s vessels are part of President Barack Obama’s new strategy for the National Aeronautics and Space Administration, which calls for the agency to develop systems capable of taking humans to Mars while helping entrepreneurs build vessels to carry astronauts to the space station.

NASA Administrator Charles Bolden told a Senate panel last month that he expects SpaceX to be able to fly its first manned mission in 2015. Musk said the company may be able to take astronauts to the station as early as 2013 if it receives a contract this year.

Source: Space Exploration Technologies Corp. via Bloomberg

Spacex' Falcon 9 rocket is scheduled for an initial test flight. Close

Spacex' Falcon 9 rocket is scheduled for an initial test flight.

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Source: Space Exploration Technologies Corp. via Bloomberg

Spacex' Falcon 9 rocket is scheduled for an initial test flight.

Obama Plan

Obama’s plan scrapped Constellation, the program that would send U.S. astronauts to the moon as a precursor to missions to Mars. The shift drew criticism from space travelers such as Neil Armstrong, the first person to walk on the moon, and lawmakers from states with NASA operations, who say the program focuses too much on unproven companies.

SpaceX is being used as a “political punching bag or whipping boy” by opponents of Obama’s plan, and budget deficits in the U.S., Europe and other places make it unlikely that government spending on space will increase in the future, Musk said in a conference call with reporters today.

“Commercial space is the only way forward,” Musk said. “If we go with super expensive government developments, in absence of some massive increase in the space budget we will never do anything interesting in space.”

‘Iron Man’

The South Africa-born Musk, 38, founded closely held SpaceX in 2002 after selling other companies that he helped start -- directory provider Zip2 Corp., sold to Compaq Computer Corp. for $300 million in 1999, and PayPal, bought by EBay Inc. for $1.2 billion in 2002. Musk is also chief executive officer of Tesla Motors Inc., an electric-car maker planning to raise $100 million in an initial share sale.

Photographer: Daniel Acker/Bloomberg

Paypal founder Elon Musk. Close

Paypal founder Elon Musk.

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Photographer: Daniel Acker/Bloomberg

Paypal founder Elon Musk.

Musk helped inspire the film version of Tony Stark, the billionaire in the “Iron Man” movies, director Jon Favreau wrote in Time magazine in April. Musk plays a cameo in “Iron Man 2,” and parts of the film were shot at SpaceX headquarters.

The 180-foot-tall (55-meter) Falcon 9 is intended to compete with the Delta IV and Atlas V from United Launch Alliance, a Boeing Co. and Lockheed Martin Corp. joint venture, and Orbital Science Corp.’s Taurus II, set for its first flight next year.

The Atlas and Delta rockets have an advantage over the Falcon 9 in the race to become the next vehicle to take astronauts to the space station because they have a track record of successful launches, Logsdon said.

Not Like Software

“The most likely winners are those that already have experience with complex aerospace systems and working with the government,” said Scott Pace, Logsdon’s successor as director of the Space Policy Institute, and an associate administrator under the last head of NASA, Michael Griffin. “Aerospace is not like software -- the barriers to entry are higher and market disruption is more difficult.”

The shuttles and European vessels have carried cargo and people to the station since construction began in 1998. The shuttle program is scheduled to shut down this year, and NASA signed a $335 million contract extension with the Russian Federal Space Agency in April to buy transport for U.S. astronauts to the outpost through 2014.

In 2008, NASA awarded contracts valued at as much as $3.5 billion through 2016 to SpaceX and Orbital to deliver cargo to the outpost. On Feb. 1, the day Obama announced his new strategy, NASA said it was giving $50 million to a group of companies to develop concepts for a station ferry, including United Launch Alliance and Blue Origin LLC, founded by Jeff Bezos, chairman and CEO of Amazon.com Inc.

Cargo Delivery

NASA expects as much as 70 percent of its cargo delivery to the station to be handled by Orbital and SpaceX, with the rest delivered by Japanese and European ships. SpaceX’s $1.6 billion 2008 contract calls for at least 12 flights, with an option for more missions for a total value of as much as $3.1 billion.

The company has spent as much as $400 million to develop its rockets, including the Falcon 9 and the Falcon 1, which launched in September 2008 after three failed attempts, Musk said.

SpaceX is aiming to test its Dragon spacecraft later this year on the second Falcon 9 flight, and carry cargo to the station on the third, most likely during the second quarter of next year, Musk said. The test has a 70 percent to 80 percent chance of succeeding, he said.

“I hope people don’t put too much emphasis on our success because it’s simply not correct to have the fate of commercial launch depend on what happens in the next few days,” he said during today’s conference call. “But it certainly just adds to the pressure.”

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net.

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