April 1, 2009

Space Industry Doing Well But Needs More Oversight

An annual report released by the Space Foundation shows that global space revenues saw an increase of 2.5 percent to $257 billion in 2008.

The report found that the industry is still experiencing steady growth even in the midst of a recession.

Commercial satellite services and commercial infrastructure made up 67 percent of revenue, compared to 32 percent from government space spending.

"Space activity has integrated itself so thoroughly into broader business activity, with an array of services vital to communication, travel, broadcast and other industries, that the space industry is now part of the mainstream economy," the report noted.

But the space industry could see the effects of a global economic slowdown later this year or early 2010. The existing amount of satellite and launch orders may be enough to hold up the industry until then.

"Generally the space business has been fairly resilient," said Marty Hauser, vice president of the nonprofit Space Foundation.

The foundation said the industry's chance of survival could rely on the increased interest in space exploration by a growing number of governments and the need to replace outdated satellites in order to continue services that depend on them.

However space industry stocks suffered a 45 percent decrease in 2008 as global stocks began to plummet. The industry had previously experienced three consecutive years of growth.

"Still, space investment and output remain strong and the long-term outlook for the global space industry is encouraging," said the report.

Robert Kehler, a four-star general and head of the Air Force Space Command, says the industry must continue its advancements in propulsion systems, power generators, sensors and must make smaller, lighter satellites.

"The sky will not be unlimited," as it was during the 1960s push to put a human on the moon, said Kehler.

However, he noted that the space industry is more immune to reduced Pentagon spending than other sectors because space programs are closely related to everything the military does.

Still, some military space programs face elimination during the planning of the fiscal 2010 budget. They include a military communications program, Transformational Satellite (TSAT), for which Lockheed and Boeing Co are bidding, according to Reuters.

The Space Foundation report came on the same day as a report from the watchdog group Taxpayers for Common Sense, which found that government spending on space programs increased 42 percent to $16.9 billion in fiscal 2009 "“ up from $11.9 billion in 2005.

"Space is crucial to our national security, and we've got the skyrocketing budgets to prove it," the group said in a statement.

According to Reuters, in compiling the first independent database of federal space programs, the watchdog group said that the spending of billions in space programs were spread among three military services and other agencies with no central authority to track spending.

"Without this bird's-eye view on spending, those who determine our space and national security policy -- in the White House, on Capitol Hill and at the Pentagon -- do not have a crucial tool for setting spending priorities," the group said.

Space programs are "so far over budget and behind schedule that many of them still have not deployed after many years and billions of dollars," it noted.

And the report found that more than 20 percent of military-related space spending now comes from agencies outside DOD, such as the National Aeronautics and Space Administration (NASA), and the National Oceanic and Atmospheric Administration (NOAA).

Additionally, the watchdog group found 12 programs with cost growth of more than 200 percent over the past five years.

The government also spends an estimated $10 billion in unclassified satellite and space programs.

Laura Peterson, senior policy analyst for Taxpayers for Common Sense, told Reuters that an expected satellite launch by North Korea may be used to justify more spending on missile defense.

"But North Korea's actions should not be seen as a pretext to conduct business as usual at an agency with a history of serious cost, schedule and performance problems," she said.

"Both space and missile defense spending suffer from a lack of budgetary discipline, timely accomplishment and clear policy priorities indefensible in today's economic climate."


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