Author Topic: Do F9 and FH "Play Well" With DIV-H and DIV-M?  (Read 3726 times)

Offline sdsds

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Do F9 and FH "Play Well" With DIV-H and DIV-M?
« on: 04/30/2015 08:08 pm »
In another thread (about Vulcan) there was a discussion of how ULA might respond if Congress enforces a policy of "no RD-180 for national security spaceflight missions," i.e. they prevent USAF from acquiring Atlas V launch services. The obvious substitutes for Atlas V are Delta IV (immediately), Falcon (soon), and Vulcan (if it comes into existence).

I suggested in that thread that USAF might, during the period when Vulcan was not available, acquire a mix of Falcon 9 and Delta IV-M launch services in addition to the launches that only Delta IV-H can provide.

@ChrisWilson68 shared his view based on a "marginal cost" analysis. In summary he doesn't believe it can ever be sensible for USAF to acquire DIV-M launch services.

He's wrong of course and I'm right.  ;D But in any case it probably doesn't make sense to have that discussion in a thread about Vulcan. I'd like to solicit here other opinions on the subject. Anyone care to chime in?
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Offline AncientU

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #1 on: 04/30/2015 08:48 pm »
Part of the ULA cost reduction strategy was to reduce vehicle lines and pads to a single AV pad each coast.  DIV-M would stay until 2018; DIV-H until they can get released by USAF (and not a second longer, it seemed).  This would consolidate most of their launches on a single vehicle which would make it even more competitive with F-9.  So the cash stream flying out the block buy and any other launches that they could win would be the funding stream to fund Vulcan.

What you are proposing in a "no Rd-180s for Defense payloads world" would seem to bring about an early demise of Vulcan (because there would be minimal if any profits -- just guessing here) and possibly taking down ULA with it.  They could still launch NASA missions, so the RD-180s wouldn't be wasted -- but this would have ULA keep all pads/lines operating which seems to be prohibitively expensive, especially when funding a full R&D effort.  So, assume that AV completely shuts down in say 2018...  Some DIV-M/DIV-H flights might be bought to maintain launch assurance, but minimal numbers because the cost would be so high. ($1B per flight if only the heavy version is flown is what was quoted.) 

So, I believe that the bridge to Vulcan is lifting of the ban on RD-180s. 
No combination of Deltas seem to get us there IMO.
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Offline sdsds

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #2 on: 04/30/2015 11:03 pm »
So, I believe that the bridge to Vulcan is lifting of the ban on RD-180s. 

From both a technical and an economic perspective that's almost certainly the best choice.

Quote
No combination of Deltas seem to get us there IMO.

Please check my arithmetic on a hypothetical situation where USAF needs to acquire 3 launches on DIV-H, and 20 launches that could be handled by "smaller" vehicles like DIV-M, F9, or FH.[1] Suppose ULA priced the DIV-H launches differently depending on whether DIV-M was also in the mix. With purchase of 10 DIV-M launches, each DIV-H would be "only" $500m; with no DIV-M purchases, each DIV-H would be $1b. Now suppose DIV-M launches were priced at $200m and Falcon launches at $100m.

Scenario (a): 3 DIV-H at $1b each, plus 20 Falcon at $100m each.
ULA gets $3b and SpaceX gets $2b for a total of $5b.

Scenario (b): 3 DIV-H at $500m each, plus 10 DIV-M at $200m each and 10 Falcon at $100m each.
ULA gets $3.5b and SpaceX gets $1b for a total of $4.5b.

Which does USAF choose? I predict it's the one where ULA gets $500m more, and SpaceX gets $1b less.

[1] For sake of discussion let's please assume FH is "smaller" than DIV-H.
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Offline Rummy

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #3 on: 05/08/2015 08:38 pm »
However... The decision to retire DIV M is ULAs to make, not the Air Force.

Offline sdsds

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #4 on: 05/08/2015 09:46 pm »
Good point! But consider: the use of RD-180 for national security space launch is not under ULA control; the development of BE-4 is not under ULA control; the funds to develop Vulcan quickly are not necessarily available to ULA. Yet at some point USAF will be procuring launches in the EELV Medium range again.

When USAF puts those launches out for bid, and SpaceX responds with an offer of Falcon, is there any chance ULA would not respond at all? I think with Atlas and Vulcan unavailable, ULA would offer DIV M at a price that would let them make a profit.

Admittedly this is uninteresting speculation if one believes Vulcan will be available in time for the next round of procurement, or the RD-180 situation won't prevent ULA from offering more Atlas V launches for USAF payloads.

Related to that, this article by Stew Magnuson includes a quote from General Hyten of AFSC, in which he seems to imply Vulcan would be available in 2022.

The Air Force has asked Congress to amend the language to allow ULA to use RD-180 engines from about 2018-2022 as it works through the second phase of the program. We dont want anything beyond that, Hyten said.
 
Ultimately, the Air Force must have two competitors to guarantee assured access to space. If Im buying launch as a service, how do I then make sure I still have access to space in this commercial partnership? Hyten asked.
 
If one provider is 5 percent cheaper than the other, and both are equally effective, you still have to keep the second operator in business, he said. There will have to be launches carved out for the second provider to meet the national policy objectives.
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Offline Coastal Ron

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #5 on: 05/08/2015 10:50 pm »
What you are proposing in a "no Rd-180s for Defense payloads world" would seem to bring about an early demise of Vulcan (because there would be minimal if any profits -- just guessing here) and possibly taking down ULA with it.

...No combination of Deltas seem to get us there IMO.

I don't see it that way.  Delta IV-M is still in production, and the U.S. Air Force is still buying them.  If it wasn't affordable today we wouldn't see them buying them.

Now granted Delta IV-M may a higher price than Atlas V, but if Atlas V is not planned to be available because of a government ban, then the government will understand why they will have to pay whatever the going price is for Delta IV-M.  ULA is allowed to price their services any way they want, and many of us have been accusing them of gouging the USG anyways, so to me this whole situation is kind of laughable.

And the U.S. Government has a valid procurement reason for supporting ULA during this transition, since it is not wholly of ULA's doing.  And if the government, after finally starting to see the benefits of competition, wants to make sure competition continues for Air Force launches, then they will come to some sort of accommodation so that ULA has enough business to survive.  Happens all the time.

So what ULA is engaged in right now is positioning, and there is a legitimate business reason for doing that.  But there is no reason the U.S. Government would not pay profitable prices for Delta IV-M during the Vulcan transition.
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Offline joek

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #6 on: 05/08/2015 11:03 pm »
Which does USAF choose? I predict it's the one where ULA gets $500m more, and SpaceX gets $1b less.

Too early to make that call.  DoD will do what is needed to keep at least two providers "healthy" (*cough*) in the name of assured access.  ULA will undoubtedly argue for as much as they can get; SpaceX will argue that ULA should receive no more than needed to keep ULA on life support.

Where national policy is concerned--or in this case the intersection of national security and industrial policy--what appears to be sensible often takes a back seat to other considerations.  If keeping ULA viable means buying DIV-M launches at a hefty premium, or buying DIV-H launches at an insane premium, or simply writing ULA a check whether or not they launch, that is what will happen.

A problem with these discussions is that they attempt to view the USG NSS launch market through the same lens as the commercial market.    The USG NSS market is not a typical commercial market.  ULA exists to serve that market; it is not, and has never been, a typical commercial provider of launch services.

The entry of SpaceX changes little.  Whether ULA can compete in that USG NSS market is irrelevant; national policy will require that two providers be kept alive--presumably one of them being ULA, at least for the foreseeable future.  The existential threat to ULA is not from SpaceX, but from the entry of another competitive provider, such as BO.

In any case, this is primarily a policy issue, and the discussion should probably be in the space policy section.

Offline joek

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #7 on: 05/08/2015 11:37 pm »
I don't see it that way.  Delta IV-M is still in production, and the U.S. Air Force is still buying them.  If it wasn't affordable today we wouldn't see them buying them.

Part of what makes it still affordable today is the draw-down of inventory and pricing based on the buy-1 contract.  As soon as the 30-core Boeing provision and associated inventory runs out, you can bet prices will rise dramatically (which was part of the reason for the FY2010 EELV should cost fire drill).

Offline Zed_Noir

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #8 on: 05/09/2015 12:20 am »
Will the US government continue with the 2 provider policy? As Jim pointed out elsewhere. Prior to the Shuttle each LV class got only one provider (Delta, Atlas & Titan).

Offline oldAtlas_Eguy

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #9 on: 05/09/2015 04:24 am »
ULA has stated before that the knee of the economy of scale curve for number of LV's per year is at 5 vehicles. So the government would need to guarantee 5 missions per year go to ULA to both keep them alive and to manage the costs per LV to a reasonable amount. The difference in 5 launches per year and 10 launches per year are not very significant compared with the cost difference between 5 and 3 launches. 3 launches would cost almost as much as the 5 five launches.

Offline Dave G

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #10 on: 05/09/2015 05:42 am »
The obvious substitutes for Atlas V are Delta IV (immediately), Falcon (soon), and Vulcan (if it comes into existence).

It's worth noting that, if you have a background in astronomy and/or theoretical physics, the name "Vulcan" is a very poor choice for any future project.

For much of the 19th century, the planet Vulcan was considered a reality. In 1859, the French astronomer Urbain Le Verrier predicted a new planet, closer to the sun than Mercury, based on deviations in Mercury's orbit from what was predicted by Newton's gravitational equations.  Years earlier, Le Verrier had successfully predicted the new planet Neptune using a similar method. So in 1859, Le Verrier's predictions were very credible.  And sure enough, that same year, astronomer Edmond Lescarbault observed a small black dot crossing the sun, confirming the existence of planet Vulcan.  And again in 1878, during a total solar eclipse, U.S. astronomers Craig Watson and Lewis Swift both independently confirmed the existence of planet Vulcan.

But with no subsequent observations, the existence of Vulcan came into dispute.

Then in 1915, Einstein's new equations for gravity (general relativity) predicted exactly the observed orbit of Mercury.

So in the end, the whole Vulcan thing was a red herring.  For astronomers and theoretical physicists, the word Vulcan is synonymous with failure.

Offline QuantumG

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #11 on: 05/09/2015 05:53 am »
So in the end, the whole Vulcan thing was a red herring.  For astronomers and theoretical physicists, the word Vulcan is synonymous with failure.

.. or misdirection.
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Offline Coastal Ron

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #12 on: 05/09/2015 06:10 am »
ULA has stated before that the knee of the economy of scale curve for number of LV's per year is at 5 vehicles. So the government would need to guarantee 5 missions per year go to ULA to both keep them alive and to manage the costs per LV to a reasonable amount.

That's about half of the current launch rate that ULA has, and if there are two competitors that would be about right just for the U.S. Government business.

I would think the government would do a 60/40 split between two providers, but regardless what split ULA got they know that they are going to have to find more orders out in the commercial marketplace.  And Bruno has said they intend to compete on the open market, but it's pretty crowded out there, and everyone (except for SpaceX) is feeling pressure to lower prices.

Can ULA get enough business to not only survive, but thrive?  I hope so, but it's up to them.
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Offline joek

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Re: Do F9 and FH "Play Well" With DIV-H and DIV-M?
« Reply #13 on: 05/09/2015 06:27 pm »
Will the US government continue with the 2 provider policy? As Jim pointed out elsewhere. Prior to the Shuttle each LV class got only one provider (Delta, Atlas & Titan).

Yes, unless there is a policy change (emphasis added)...
Quote from: 10 U.S.C. 2273 - Policy regarding assured access to space: national security payloads
(a) POLICY.It is the policy of the United States for the President to undertake actions appropriate to ensure, to the maximum extent practicable, that the United States has the capabilities necessary to launch and insert United States national security payloads into space whenever such payloads are needed in space.
(b) INCLUDED ACTIONS.The appropriate actions referred to in subsection (a) shall include, at a minimum, providing resources and policy guidance to sustain
(1) the availability of at least two space launch vehicles (or families of space launch vehicles) capable of delivering into space any payload designated by the Secretary of Defense or the Director of National Intelligence as a national security payload; and
(2) a robust space launch infrastructure and industrial base.

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