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             Congressional Research Service
             Inforrning the legislative debate since 1914



Challenges to the United States in Space


Preserving key U.S. national security and economic
interests depends on the continued and widespread use of
space-based systems. Satellites are as essential to military
and intelligence operations as fighters, warships, and
combat  vehicles. Major portions of the global economy
now  rely on space systems; they facilitate modern banking,
communications,  agriculture, transportation, as well as a
host of other commercial and civil activities. A June 2015
Department  of Homeland Security report estimated $1.6
trillion of annual U.S. business revenues heavily depend on
satellites. Space systems are now a permanent and seamless
component  in the nation's critical infrastructure, often seen
as essential as the electrical grid or the highway system. In
fact, the entire global financial system depends on GPS, for
instance.

Space, however, is no longer the exclusive domain of great
powers, nor does it remain a sanctuary for science and
exploration, free from conflict. In fact, U.S. officials and
others are increasingly referring to space as a warfighting
domain. Adversaries are aware of U.S. space superiority
and understand the critical reliance on space systems to
achieve U.S. national interests. Many analysts believe it
prudent to plan for a future in which space is increasingly
competitive, congested, and contested.

Competitive
Nations with comprehensive space programs possess
distinct military, economic, and scientific advantages, but
complexity, expense, and barriers to entry mean that still
only a few nations have comprehensive space capabilities.

The rise of a robust global commercial space sector is
rapidly altering the picture. Direct spending annually
exceeds $300 billion, with more than two-thirds in the
commercial  sector. Well over $100 billion in annual
revenues arises from commercial space data services
(mostly direct-to-home television). Over $100 billion
derives from commercial space equipment manufacturing.
Finally, governments spend about $80 billion per year on
space programs, with the U.S. government spending
roughly 60%  of that $80 billion.

Most  space technologies have become dual-use, and
commercial  space revenues now dwarf investments by
governments. This creates a dilemma. Governments
regulate their space industries for strategic reasons, but
more and more, nations also compete in the far-less
regulated commercial space market. Eleven nations now
have the space industrial capacity to develop, manufacture,
launch, and operate their own space systems. More than 50
nations have purchased and operate satellites and have
partial elements of a space industrial base. U.S., European,
Russian, and Japanese firms still dominate, but India and
China possess comprehensive and rapidly growing space


Updated March  20, 2018


industries. China is especially aggressive in capturing
market share in developing nations. Nations as diverse as
South Korea and the United Arab Emirates are pursuing
commercial  space industries.

Although the global space economy has grown steadily
over the past decade, the market is finite. At the same time,
analysts note that the competitiveness of a nation's
commercial  space industry has major implications on its
ability to field affordable national security space systems.
Most observers believe that maintaining a healthy U.S.
space industry over the long term could require finding a
better balance between viewing the space industry as a
strategic military asset and allowing its firms to compete in
the expanding global commercial space market.

A key focus area is the U.S. national security launch
market. Since the early 2000s, a joint Boeing Lockheed
venture, United Launch Alliance (ULA), provided the Air
Force with a number of certified launchers, the Atlas and
Delta rockets. A new competitor, SpaceX, entered that
market, gaining certification for its Falcon-9 launcher while
lowering launch costs. Although the Falcon-9 cannot launch
the heaviest national security payloads, SpaceX recently
test launched the Falcon Heavy, which is designed to carry
such payloads; its certification timeline is unknown. In
response, ULA  is building the new Vulcan launcher, hoping
that a modern design achieves performance at a cost
competitive with SpaceX.

Many  observers believe that market dynamics have the
potential to reduce prices, but they also require monitoring
to ensure uninterrupted strategic access to certified U.S.
launchers. The existing Atlas and Delta inventory and the
Falcon-9 are expected to provide sufficient certified
launchers to meet national security requirements for the
next few years as market dynamics settle. However,
developing new rockets remains challenging, and timelines
and certifications may not go as planned. This is especially
true in light of broader global market pressures facing U.S.
launch companies.

Worldwide,  the number of launch contracts available for
competition averages just 20-25 per year. Arianespace in
Europe has historically dominated this market, followed by
Russia. China and India are taking market share as well.
Launch  supply may soon outstrip global demand. Estimates
predict a dip in U.S. government launch demand coincident
with SpaceX  and ULA  fielding their new launchers. The
U.S. launch sector likely faces small margins for error in
crafting future development and production plans.

Congested
There are over 1,000 active satellites in orbit. However,
nearly all satellites operate in just three key orbital regimes.


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