How to combine the idea of opportunity cost, cul-de-sac, and government overruns in one post?
Yesterday’s Wall Street Journal editorial (behind paywall) says:
When it was first conceived, the shuttle was supposed to be a kind of space truck, going into orbit 50 to 75 times a year and carrying large payloads at a cost of $54 million a launch in 2011 dollars. It didn’t work out that way. The shuttle went aloft an average of five times a year. The cost-per-launch averaged some $1.5 billion. Its heaviest payloads barely exceeded what an unmanned Delta IV rocket can carry.
Let’s do some math, shall we?
Under-delivery of launches per year by a factor of 10 or 15 with cost per launch about 28 times higher than advertised.
An average of five shuttle launches a year at average cost of $1.5 billion is a total cost of about $7.5B per year. The advertised price was supposed to be for 50 launches a year for total of $2.7B up to 75 a year for $4.0B. Looking at it another way - only five launches per year at the advertised rate would have freed up about $7.23B of that $7.5B. (Okay – not exactly a fair calculation given the need to spread annual costs over a smaller base – even allowing for that, planning for 5 instead of 50 or 75 would still have freed up a huge portion of funding.)
Here is the really serious question. What was the opportunity cost? What could have been done with an extra 45 shots per year or freeing up 90% of the cost?
The Wall Street Journal’s comment says the program
…exacted a huge opportunity cost on an agency that could have done more with its money than put humans in orbit again and again.
I discussed the idea of cul-de-sacs in an earlier post about Seth Godin’s book The Dip. The higher costs and lower number of launches described above illustrates the cul-de-sac concept.
Where to now for space exploration? The Journal editorial says:
It will now fall to innovators and entrepreneurs like Burt Rutan, Richard Branson and Elon Musk to find new ways to put people into space.
Actually, the future of manned spaceflight in the United States is incredibly bright. Not enough time to go into that now. Google any of those names above. Or check out An Army of Davids. But again, the question to ponder is how far along could we have been?
I’m not complaining about what the shuttle did accomplish. Hip-hip-horrah for NASA!
Instead I’m pondering how much more could have been done.