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Jeff Bezos talks space, as race for funding heats up

CNBC CNBC 13/04/2016 Jane Wells

© Provided by CNBC The Space Symposium in this scenic Rocky Mountain setting is usually a staid affair, with lots of people in suits talking about propulsion systems. 

This year, however, the gathering was shaken up by a newcomer. A billionaire who has big plans for space, and who has been quietly competing for contracts.

We're not talking Elon Musk.

This billionaire was Jeff Bezos of (AMZN).

"I've been obsessed over rocket, rocket engines and space flight since I was five years old," Bezos told a packed hall at the Broadmoor Hotel here on Tuesday. Internet retailing made Bezos rich, and he's pouring part of that fortune into his rocket company Blue Origin.

Wealthy players like Bezos, Musk, Richard Branson and others have invigorated the space industry, and yet its progress is seemingly glacial compared to the growth Amazon experienced on the internet. Bezos said the internet was able to grow rapidly due to existing infrastructure — phone lines. Amazon was specifically able to grow so fast thanks to existing package delivery companies and credit card payment systems. However, for space, "The big heavy-lifting pieces are not yet in place," he said. "I think it's just one big piece: We need much lower cost of access to space. It's just still too expensive."

Reusable rockets should bring down the cost, but Bezos said the other hurdle to success is the lack of practice. "If you need to have a surgery, find somebody who does the operation 20 to 25 times a week."

Bezos thinks the key to practice in the rocket industry is space tourism, and Blue Origin hopes to use its New Shepard rocket to regularly take six paying passengers at a time to the edge of space where they can float for a few minutes before returning to Earth in a parachuted capsule. Test astronauts are slated to go up in 2017, with paying tourists in 2018.

Bezos showed previously unseen video of the latest launch and return of his New Shepard rocket earlier this month. As he described the video — taken from a camera onboard, the rocket viewers could see the "ring fin" turn a "nice toasty brown" as it re-entered. This was the third time Blue Origin had launched and landed the rocket. "It's just a few thousand dollars to refurbish them," Bezos said, with cleanup mostly consisting of sanding the toasted areas and reapplying thermal protection. "We never took the engine out of the vehicle."

Bezos does hope to go to space himself some day, but only on one of his own rockets. He said the Soyuz program was offering a fly by of the moon if he was willing to pay around $200 million. "It was expensive," he said to laughter. Then he asked the Russians, "'Has it ever been tested?' And they were like, 'No.'" When Bezos mentioned that sounded awfully risky, the Russians replied, "Well, for $400 million we'll test it for you." He passed.

Big picture, Bezos sees millions of people living and working in space. He thinks space travel will not only help us migrate off the planet, but actually help us to save the planet. What's more, way down the road, he thinks most heavy industry can be done offsite, "and Earth can be zoned as residential and light industry."

While Blue Origin is best known for its rocket, much of the focus at the Space Symposium was on the company's engine, the BE-4. It is fueled by liquid oxygen and liquid methane, and United Launch Alliance (ULA) wants to use it for its new Vulcan rocket. ULA has been using Russian engines for its military launches, and both Congress and the Air Force want only American engines on American rockets.

The Air Force recently gave four companies contracts worth $242 million to develop new engines. More money will follow, though each company has to bear about a third of the cost of development. One of the companies receiving funds was Blue Origin.

"There can be many winners in truly great industries," Bezos said. "I want Virgin Galactic to succeed. I want SpaceX to succeed. I want United Launch Alliance to succeed. I want Arianespace to succeed. And of course, I want Blue Origins to succeed, and I think they all can."

Perhaps tellingly, one name he didn't mention was Aerojet Rocketdyne, which got nearly three times as much money as Blue Origin did from the Air Force to develop a competing engine called the AR1 for ULA'S new rocket.

Aerojet vice president of space Julie Van Kleek said long term the AR1 is less risky and cheaper than Bezos' engine. "It uses the same fuels that we're currently using today. You don't have to upgrade the infrastructure down at the launch pad, and you have minimal changes down at the tankage," she said. "This is the lowest cost solution and the fastest way to do it."

ULA will ultimately decide which engine it wants, a decision that will probably come later this year. But there could be political pressure. Aerojet partner Dynetics believes the fact that the Air Force gave Aerojet more money for the AR1 may show which engine the Pentagon prefers. "The government is going to have a lot to say on who gets picked," said Dynetics VP Steve Cook.

Then there were the politically incorrect sentiments expressed by a ULA executive last month comparing Bezos' Blue Origins to a "super rich girl" while Aerojet is a "poor girl." The executive resigned the next day, and ULA CEO Tory Bruno has repudiated those remarks.

Van Kleek, a rare woman running a rocket program, smiled when asked how it feels to be called the poor girl. "I think a lot of interesting comments are being made during this debate," she said. "We're focused on the finish line, and we're confident in the AR1."

Other news at the symposium:

Last week, wealthy developer Robert Bigelow watched a dream come true as an expandable space habitat he developed was launched to the International Space Station. Soon astronauts will expand the habitat and begin testing it for livability over the next two years. This week Bigelow Aerospace has announced the next major step. It has contracted with ULA to launch two larger versions in 2020.

The Bigelow B330 habitats will be 20 times larger than the one being tested at the space station, with 12,000 cubic feet of space. It's not clear if these, too, will attach to the space station, or if Bigelow will launch them as stand alone space stations which he hopes to lease out to companies or governments. "We can't being to imagine the future potential of affordable real estate in space," said ULA CEO Tory Bruno in a statement.

Orbital ATK has created a satellite which can be launched and spend 15 years moving from satellite to satellite to repair, refuel, and even move the existing spacecraft into a new orbit. The aim is to extend the life of satellites. Orbital's first customer is Intelsat, which has signed a five year agreement and will pay once the service is proven and available (terms not disclosed).

Orbital ATK plans to launch the first of the so-called Mission Extension Vehicle (MEV) in 2018, sending it to a test satellite for practice. The company is investing $1 billion in new technologies like the MEV. Within five years, Orbital ATK hopes to have five in space. CEO David Thompson believes the vehicles could expand beyond fueling and fixing MEV "to potentially in-orbit assembly of multiple structures."

Which may be one small step toward Jeff Bezos' dream of offloading the heavy lifting to space, so Earth can be "rezoned."

—By CNBC's Jane Wells. Follow her on Twitter: @janewells 

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