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STATEMENT OF G. HARRY STINE
Mr. STINE. Thank you, Mr. Chairman. I have already submitted a written statement for the record, but I would like the opportunity to summarize the statement verbally today, because there are several points that should be emphasized.
I believe as a result of studies and watching the U.S. space program grow for the past 25 years, that most people really don't understand too well what we are doing in space. People tell me that there are better ways to spend our efforts and money. It always turns out that they want to spend our efforts and our money on their pet projects. Obviously, the only way to get a vital growing space program with excitement in it is to have one that pays for itself.
I think we can have one in the very near future if we set about to do it now. There are three separate areas to our space program. They might be equivalent to past, present, and future, except that there is no hard and fast dividing line between them.
The first is exploration. We have been doing this very successfully since the end of World War II. The second area is utilization or space industrialization. This isn't new either.
Space industrialization can be very succinctly defined. Space industrialization is the use of orbital space around the Earth for providing services and products for people on Earth. More about this after a brief digression into the third area of space habitation.
This is often called space colonization. It is usually confused with space industrialization. It is neither. Large-scale human habitation of space cannot be expected to take place until space industrialization has been established to the point where it can justify the presence of large nunmbers of people in space. Until we get space industrialization established, discussions about space colonization are just that talk. Everybody talking about heaven ain't going there, at least not with the taxpayers' money footing the bill or stockholders' money either.
For the next 10 to 15 years, our national space program must therefore consist of both space exploration and space industrialization.
The most common concept of space out in the hinterlands is that it is a great place for scientists to go to play with their hobbies. Sorry, that's the image. NASA paid Burston-Marsteller, the public relations firm in New York City, to tell them essentially that. They could have saved their money by listening to what people have been saying.
However, there is one area of space that nobody questions. Nobody objects to it and nobody cries that its budget be cut. Everybody enjoys it. Communication satellites.
Communications happens to be one of the three areas of space industrialization that is successful. Comsat not only paid its stockholders 35 cents a share in the last quarter of last year, but it also paid the U.S. Government more than $5 million in income tax. The communications area of space industrialization is bound to expand in the next 5 years, and it won't be alone because I believe it will be joined in the 1980's by a second area, space manufacturing.
Space manufacturing is the fabrication in space of new or improved materials that can be made only in the weightlessness and high vacuum of orbital space, or products that can be made better under these unique
conditions. There is money to be made out there. I will give you more remarks about that in a moment.
The third area of space industrialization is energy, the potential development and on-line operation within 10 to 15 years of solar power satellites, SPS for short. We just love acronyms in the United States. SPS can convert the abundant constant solar energy that is available in space into a form for transmission to the ground in a nonpolluting manner for distribution on existing electric power grids.
If we can get to the year 2000, or 2001 with a space program consisting of space exploration, which continues to fill the cupboards of scientific knowledge, and a space program consisting of space industrialization-communications materials and energy-there is a very good chance that such a space program will not only be paying for itself, but paying back every penny that's been spent on it since 1957, plus putting additional money into everybody's pocket to boot.
We have the basic hardware to get started. We've got the Space Shuttle. Next year it flies, but we are going to need all five orbiters if we are going to do the kind of job we have very good reason to believe is waiting to be done out there.
The argument for building only three orbiters smacks of the sort of short-sighted button-counting that has historically hampered both Government and business in this country. I am not going to cause further historic embarrassment to the U.S. Senator who during the appropriations bill debates of 1907 said, "Why does the Army need another airplane? They have one." There were also suggestions that an airplane be purchased for Joint Army-Navy use, and that they “take turns flying it."
We have other space systems, the bare minimum to get this third industrial revolution underway in earnest, but we are going to need to develop some new technologies to really make it come off.
Most important, we are going to have to work to get some Government and business policies changed. Antitrust and SEC regulations, for example, currently prohibit private enterprise in this country from concentrating enough capital to enable space industrialization to get moving in earnest. Some Federal rules and regulations and laws will have to be looked at and possibly changed.
I am speaking here not only on the basis of the work I did for my book, "The Third Industrial Revolution," but also work I have been involved in for the past 16 months. I have been working with a team of consultants for Science Applications, Inc. We have been working on a space industrialization contract for NASA.
Now, I want to make one thing very clear. I am speaking here today as an individual, not as an employee or consultant, or contractor to anyone in NASA or the aerospace industry. Nobody has approved of what I am saying or what I wrote in my statement.
As a matter of fact, Science Applications Inc., told me to go ahead and "tell it like it is." Incidentally this has been the manner in which the whole SAI space industrialization study has been conducted. And people at Marshall Space Flight Center and NASA have just been delightful to work with. They really want the answers. They just don't want reports of things they would like to hear. The individuals on this team are listed in my written statement-I'm really indebted to them for a lot of the information I'm going to try to pass on this morning.
With a mere 3 man-years of effort in terms of funding, we tried to take as indepth a look to the extent we were able at space industrialization and the future of the space program. I'm happy to report that it looks like we have a real winner, if the Government and domestic industry decide to get down to doing something before somebody overseas does it first and grabs a significant share of the market.
Two important pieces of information come from the study. One was a look at potential markets for the services and products from space in the areas of communications, materials and energy. We went at this in a very conservative businesslike approach in a classical straightforward, almost textbook manner.
I have some charts here I would like to put up on the screen to show what we have managed to come up with.
I won't try to give you a complete rundown on marketing, which is my field, but here is basically the methodology we used. We looked at 227 candidates. We used market data from places such as Predicasts and U.S. Department of Commerce. We had a look at what the market would be if we had a certain product available from space and it looked like there would be a good possibility of having such a product and service available from space. We took a look at best case and worst case and tried to bracket.
Here is a summary. We took 227 of these, and because there were better terrestrial alternatives or the technology requirements and space transportation costs were so great, we eliminated all but 27 of them. There were a couple borderline cases that we pursued just because they looked interesting. But in the information area there are 16 services, and it looks like 20 years after we started them, they could be bringing in at the best perhaps $100 billion a year, and maybe at the worst $50 billion per year.
In materials, we looked at 10 products, maybe $10 billion per year best case.
Energy looked like it was a very, very good area. We only looked at three services, and using again best case and worst case-we used figures from Arthur D. Little as being very conservative, and the figures from Princeton University as being optimistic-we still got total revenues running up into tens of billions of dollars per year or more. [Slide.]
Let's just take a look at a couple of representative things we investigated. Here is one which is basically large-scale data transfer. By employing very large satellites in orbit, this permits you to have very small, very inexpensive ground stations. This is just exactly the opposite of what we have today where you are payload limited in the satellite and your ground stations are large. If, with the Shuttle, OTV, and a number of other systems within 10 years, we could put very large communications satellites in geosynchronous orbit, this would allow us to have cheap, inexpensive ground stations. It would, for example, give a small town library the opportunity to have its little ground station-which may not be any bigger than this projectorand a small antenna on the roof working with this very large satellite up in geosynchronous or earth-stationary orbit and having available at its data console perhaps the entire contents of the New York public
library, plus the contents of the Library of Congress. Think of what that would mean just to the education system alone in this country, to expand the capabilities of our libraries. There are obviously business uses here, too. Business continually works on the need for information. One of the very first things Thomas Edison learned was that the information about a subject was often more valuable than the subject itself. It led him to invent the stock ticker.
We didn't even look at the possibility of integrating the growing market for home minicomputers into this system. But if they were also able to work with this geosynchronous large-scale data satellite, the curves go even higher. And as you can see, we are talking here again, in 10 years the libraries level out at about 20,000 libraries— this is best case I'm talking about here-and revenues of $100 billion per year. The business use looks even better at the end of 10 years, and the market is still growing with 1.6 million businesses using its services with something over $5 billion per year in revenues.
This is one that everybody likes. We are using the same concept. of a very large satellite and very simple ground stations. We can actually bring the mythical Dick Tracy wrist radio into reality. But what do the numbers look like? Can you really make money with such a thing? These figures suggest we can. This was very conservative. In a situation like this, we base the market projections on analogous products such as pocket calculators, digital wrist watches, and CB radios. We came up with these curves because there are two markets. You have revenues from sales and revenues from calls. Revenues from sales of the device itself start out at about $300 each and drop to $30 each. The revenue from calls starts out at around $3 per call and came down to about $1.30 per call.
The wrist radio is just that. It may be a wrist radio or a pocket radio, depending upon how the technology moves along in the next 10 to 15 years, but it is very definitely possible. We are talking about 50 million users. We figures that eventually the market would saturate with one of these things to every four people in the United States. Right now there is one telephone for every two people in the United States. Everybody over the arbitrary age of 16 might have one. We picked that as a cutoff age. The revenue from calls runs anywhere from $4 to $20 billion per year.
This is the result of what happened when we look at solar power satellite using the very conservative figures from Arthur D. Little and the very optimistic figures from Princeton University. We assumed technical feasibility. This is yet to be demonstrated. If the solar power satellite is indeed technically feasible, it generates considerable revenue. But we need to do some work before we know whether or not we are there.
I feel very confident that if we run into no unforeseen technical snags or policy hangups, the products and services in space industrialization will not only pay for themselves but pay for the space program as well, and pay dividends to investors, and pay income taxes to the Government, and create jobs, and increase the gross national
product, and improve the standard of living, and do it all without any impact upon the Earth's biosphere.
The reason I showed these charts was to give you some indication of the magnitude of the possible revenues from space industrialization. The second important thing we have learned in our study was the reaction of people from domestic industry to all of this. After all, these people are the prototypes of the people we foresee doing these types of things in space. So we went to people in domestic industry, quite separate from the aerospace industry. We got some very interesting feedback.
For example, in the communications area, nobody really understands the growth of activity out there is geosynchronous orbit. I really didn't either until I got a look at it. But, by 1981, it appears that we may have a real problem out there with not only frequency crowding but location crowding in orbit as well. You might think, well, there's an awful lot of space out there and an awful lot of places to put satellites, but there are preferred locations for geosynchronous satellites, and these locations will begin to get crowded very shortly.
The communications people we talked to felt that the United States was going to have to get their act together, particularly about geosynchronous communications platforms, combining many satellites into one large platform. But nobody is doing anything.
In the materials and products areas of space manufacturing, we got strong feedback. We were told that (a) products were poorly defined, (b) markets were too indefinite, (c) it could be done cheaper on the ground, they think; they don't know, (d) the experimental data is too soft for their industrial use, (e) they cannot make the necessary decisions based on the data available yet, (f) they told us that those of us working in the space area take things for granted that are really theoretical and unsubstantiated as far as they are concerned, (g) they pointed out that the risks are very large relative to the capital outlay which appears to be required, (h) they say the return on investment is too far away, (i) and every one of them said that space transportation costs are too high by a factor of 100 or more in most cases.
I talked to one firm that makes laminates for electronics, and they said, "We can't even think about doing this is space. Our product right now, which is perfectly adequate, costs us about $1 a pound.' But everyone we talked to said that the prospects looked "interesting" and their companies would probably get involved if their competitors did. They wanted to be kept plugged in. They all felt that some appropriate risk-sharing policy on the part of the Government would spur a tremendous amount of interest among domestic industry. Most of all, they wanted feedback from NASA in the language of domestic industry.
We talked to people in the utility industry. They were very, very attracted by the solar power satellite concept. They thought it was an open-ended solution to the energy problem. They did not see it being on the line before 1995. Of all of the energy alternatives currently under study as far as they are concerned, the solar power satellite appeared to have the most acceptable environmental impact. They felt that the solar power satellite neatly separated the generation and distribution issues.
Their most important comment was, "Stop treating the solar power satellite like a space program and start treating it like a power pro