Memorandum 82
Submission from Virgin Galactic
Virgin Galactic is pleased to provide a response
to the subject inquiry. We welcome the opportunity to communicate
our experience from developing a business model for safe, frequent
and affordable access to space for the general public. I hope
that this evidence will convey properly the strategic importance
to the UK of fostering a commercial space sector through appropriate
policy. Recent applications of science and technology to communication
and sensing satellites have influenced world economy globalisation
and identified threats to the world's ecosystem. We believe that
an effective policy which ensures access to space for UK industry
and government is essential.
1. EXECUTIVE
SUMMARY
1.1 The following testimony is provided
in support of the Science and Technology Committee inquiry into
aspects of UK space policy. I am Will Whitehorn, President of
Virgin Galactic (VG) and senior investment advisor to the Virgin
Group. I can provide your inquiry with evidence from the perspective
of a commercial enterprise engaged actively in the international
space sector.
1.2 The economic and public benefits of
a profitable, sustainable and diverse UK space sector are tremendously
promising. The realisation of these benefits is dependent on UK
space policy and its openness and willingness to foster commercial
development.
1.3 VG is excited to be leading the way
in developing safe, frequent and affordable human space access
services. VG believes this has the potential to complement UK
space policy and benefit the UK economically and socially. By
the end of this decade VG intends to provide sub-orbital space
tourism services to the general public, initially operating from
the US. Unfortunately, VG's ability to operate in the UK is currently
hindered by a lack of:
— an appropriate domestic regulatory
framework;
— emphasis of public funding toward
human spaceflight activities;
— financial incentives; and
— flexibility imposed by US export
control regimes.
1.4 To maximise the commercial benefits
and wealth creation from UK space-based technologies, I recommend
the Committee addresses the following in its inquiry:
The UK should
— encourage private sector investment
in space activities through commercial incentives, possibly through
monetary and fiscal policy;
— develop a more favourable policy
and regulatory regime for the emerging space markets. Reference
should be made to the US which has been forward thinking on this
matter;
— ensure that export control regimes
do not unnecessarily hinder the private sector, whilst protecting
the UK's national interests and those of its allies;
— invest in Public-Private-Partnership
type arrangements for basic infrastructures, such as space ports,
that can be shared with the private sector for commercial activities;
and
— leverage and foster commercially
available technologies for affordable access to space. Market
forces dictate that the private sector will deliver the most competitive
products, for which the government can be a major consumer. Commercial
launch systems have the potential to alleviate any pressure on
the UK government to develop its own human spaceflight programme,
but can provide avenues for involvement, which we would be pleased
to elaborate on.
1.5 Delivery of public benefits from space-related
activities could be realised not only through the UK's various
government departments, but also its industrial partners and world-renowned
research facilities. VG acknowledges the UK's leading position
in areas such as Astronomy and Earth Observation. The UK could
expand on this by:
— developing renewable, benign
fuels that will reduce the environmental impact of space access
and transportation here on Earth. The Virgin Group is proud to
be leading in this area with the establishment of Virgin Fuels,
which will invest up to $400 million in renewable energy initiatives
over the next three years, and
— considering state funding and/or
research into enabling technologies such as those required for
high-speed aerospace transportation.
1.6 Encouragement of the commercial space
industry and associated technology development in the UK could
raise funds for the Exchequer through Intellectual Property (IP)
rights and tax revenue.
1.7 Support for space-related research and
the UK skills base will be enhanced by the involvement of the
commercial sector. For example:
— VG has already engaged several
UK companies as possible contributors to the experience VG offers
to its customers.
— The UK's insurance market could
build on its success and expertise by offering services to the
commercial space sector.
— Establishment of a robust commercial
space sector will limit:
— the "brain drain" to the
wider EU and US of the UK's brightest individuals who are interested
in this fascinating industry, by providing career incentives and
opportunities; and
— the decline in the uptake of science
and engineering courses at secondary and tertiary levels. As evidenced
by the Apollo era, spaceflight can increase national pride and
inspire our young to pursue studies in technical disciplines.
VG is proud to have tremendous support from the UK public, with
some 16.3% of our customers based in the UK.
Background
1.8 By the end of this decade VG intends
to provide sub-orbital space tourism services to the general public.
Initially operating in the US, VG's customers will experience
the thrill of a rocket ride to an altitude of approximately 110
km followed by zero-gravity "floating" and a spectacular
view of the Earth below. Providing the service on the SpaceShipTwo
craft at the highest achievable level of safety is of primary
importance to VG, our pilots and our partners.
1.9 In the next few decades, VG forecasts
that the industry will progress beyond sub-orbital space tourism
to high-speed civil transportation outside the atmosphere and
private orbital facilities. As well as human spaceflight, both
science and payload deployment will be possible.
1.10 VG wishes to be a global leader in
future space transportation services. VG therefore encourages
further involvement by the UK government in technology development
and policy initiatives aimed at increasing domestic incentives
and decreasing regulatory barriers.
2. OBSERVATIONS
2.1 Below is a discussion of general observations
based on our experience to date in establishing a business model
for VG. As with all new private ventures seeking to be successful,
there must be:
— sufficiently mature technology
in the product or service being offered;
— an inviting or non-intrusive
regulatory environment;
— government policy that is open
to and allows commercial innovation;
— a stable and predicable legal
framework; and
— an identifiable customer demand
that results in a commercially viable return on investment.
2.2 Technology
2.2.1 Demonstrating the innovation and cost
efficiency of the commercial space sector, the technology now
licensed by VG was developed with private investment. Private
enterprise can also extract the most commercial potential from
technology developed by government-sponsored civil and military
efforts.
2.2.2 In order to widen the opportunities
for safe and commercially viable spaceflight for the general public,
advances will need to be made in key technical areas. For example,
high-speed trans-oceanic/continental civil transport will likely
require at a minimum:
— reliable, air-breathing rocket
engines;
— light-weight, reusable thermal
protection systems;
— advanced avionics and flight
software;
— renewable, benign fuels that
minimise environmental impact;
— low-cost operations including
ground systems and support infrastructure; and
— a significantly higher level
of safety performance than has been achieved on spaceflight missions
to date.
2.2.3 It is our belief that these technologies
could be developed independently in the UK at its various government
departments, industrial partners and world-renowned research facilities.
Fostering technological development in the private and public
sectors should be a principal objective of UK space policy.
2.3 Regulatory
2.3.1 It is imperative that the UK develop
a supportive and stable regulatory framework for the emerging
commercial space industries, such as space tourism, that will
appreciate and account for the early risks and challenges associated
with development of this new industry. For example, the formation
of the Office of Commercial Space Transportation (AST) under the
auspices of the US Federal Aviation Administration, assists the
industry in specifying requirements for the emerging suborbital
tourism and private space launch market.
2.3.2 VG's operations will commence in the
US for two main reasons:
— VG has the ability to operate
in the US through policy such as the Commercial Space Launch Amendments
Act (CSLAA) of 2004; and
— the proprietary technology being
US-based and governed by export control regulations, specifically
the International Traffic in Arms Regulations (ITAR).
2.3.3 Similar regulatory representation
in the UK would be beneficial in accelerating the development
of commercial space launch systems in the UK for both manned and
unmanned payloads. Commercial systems have the potential to alleviate
any pressure on the UK government to develop its own human spaceflight
programme.
2.3.4 VG's ability to operate in the UK
is currently hindered by a lack of an appropriate domestic regulatory
framework and inflexibility imposed by US export control regimes.
2.3.5 It is vital that the UK government
works across borders with its allies to ensure a workable and
equitable export control regime. Whilst VG agrees that it is paramount
to protect the national interests of the UK and its allies, export
control regulations must not present an unnecessary and/or insurmountable
barrier to commercial progress in the space sector. It is VG's
desire to have operations running in the UK in the near future.
A barrier to realising this objective could be an overly-restrictive
export control regime.
2.4 Commercial
2.4.1 Commercial incentives, possibly through
monetary and fiscal policy, would assist greatly in the development
of space-related industries in the UK. Overseas governments are
offering financial incentives to emerging space companies through
public funding of infrastructure such as spaceports. In the US,
the state of New Mexico's assistance in the development of Spaceport
America assisted greatly in confirming the commercial viability
of VG. The state has been visionary in understanding the medium
and long term economic and social benefits from supporting commercial
launch systems.
2.4.2 Incentive schemes such as the Ansari
X-Prize have also accelerated development and funding for the
commercial space sector. Historically, financial prizes for the
demonstration of technological advancement are a British invention—in
the early years of the last century, the Daily Mail newspaper
offered a series of aviation prizes including $50,000 for the
first non-stop crossing of the Atlantic; that first crossing was
made by Captain John Alcock and Lt Arthur Whitten Brown in 1919.
More recently, the Kremer prize is an example of financial incentives
spurring technological advances in lightweight materials for aircraft.
Speaking for private industry, VG encourages the provision of
such prizes in the future.
2.4.3 The potential revenue generation from
UK space policy fostering a commercial space sector is significant.
For example, affordable access to space, such as that provided
by VG, enables previously uneconomic research in fields such as
pharmaceuticals, earth sciences and life sciences, thus increasing
the pace of technological development. If UK companies can partake
in this research, IP opportunities can be realised increasing
future wealth creation.
3. CONCLUDING
REMARKS
3.1 VG is excited to be leading the way
in developing safe, frequent and affordable human space access
services. VG believes that this venture represents a watershed
moment in human spaceflight from that of a government-led and
dominated realm to a robust, self-sustaining private industry.
A combination of public and private technology development, government
incentives, reduced regulatory barriers, a stable legal environment
and the spirit of entrepreneurship of our company's founder are
enabling this natural progression.
3.2 VG regards the Committee's wide-ranging
inquiry into UK space policy as a positive step forward in realising
a more profitable and sustainable UK space sector. In summary,
VG encourages the Committee to investigate the benefits of:
— introducing incentives for private
sector investment in space activities;
— reducing regulatory barriers
for the emerging space markets; and
— fostering public and private
technological development.
November 2006
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