[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]








                       AN OVERVIEW OF THE OFFICE
                  OF COMMERCIAL SPACE TRANSPORTATION'S
                      BUDGET FOR FISCAL YEAR 2013

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON SPACE AND AERONAUTICS

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                        TUESDAY, MARCH 20, 2012

                               __________

                           Serial No. 112-70

                               __________

 Printed for the use of the Committee on Science, Space, and Technology






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       Available via the World Wide Web: http://science.house.gov

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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                    HON. RALPH M. HALL, Texas, Chair
F. JAMES SENSENBRENNER, JR.,         EDDIE BERNICE JOHNSON, Texas
    Wisconsin                        JERRY F. COSTELLO, Illinois
LAMAR S. SMITH, Texas                LYNN C. WOOLSEY, California
DANA ROHRABACHER, California         ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland         BRAD MILLER, North Carolina
FRANK D. LUCAS, Oklahoma             DANIEL LIPINSKI, Illinois
JUDY BIGGERT, Illinois               DONNA F. EDWARDS, Maryland
W. TODD AKIN, Missouri               BEN R. LUJAN, New Mexico
RANDY NEUGEBAUER, Texas              PAUL D. TONKO, New York
MICHAEL T. McCAUL, Texas             JERRY McNERNEY, California
PAUL C. BROUN, Georgia               TERRI A. SEWELL, Alabama
SANDY ADAMS, Florida                 FREDERICA S. WILSON, Florida
BENJAMIN QUAYLE, Arizona             HANSEN CLARKE, Michigan
CHARLES J. ``CHUCK'' FLEISCHMANN,    SUZANNE BONAMICI, Oregon
    Tennessee                        VACANCY
E. SCOTT RIGELL, Virginia            VACANCY
STEVEN M. PALAZZO, Mississippi       VACANCY
MO BROOKS, Alabama
ANDY HARRIS, Maryland
RANDY HULTGREN, Illinois
CHIP CRAVAACK, Minnesota
LARRY BUCSHON, Indiana
DAN BENISHEK, Michigan
VACANCY
                                 ------                                

                 Subcommittee on Space and Aeronautics

               HON. STEVEN M. PALAZZO, Mississippi, Chair
F. JAMES SENSENBRENNER JR., 
    Wisconsin                        JERRY F. COSTELLO, Illinois
LAMAR S. SMITH, Texas                TERRI A. SEWELL, Alabama
DANA ROHRABACHER, California         DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma             FREDERICA S. WILSON, Florida
W. TODD AKIN, Missouri               HANSEN CLARKE, Michigan
MICHAEL T. McCAUL, Texas             VACANCY
SANDY ADAMS, Florida                 VACANCY
E. SCOTT RIGELL, Virginia                
MO BROOKS, Alabama                   EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas












                            C O N T E N T S

                        Tuesday, March 20, 2012

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Steven M. Palazzo, Chair, 
  Subcommittee on Space and Aeronautics, Committee on Science, 
  Space, and Technology, U.S. House of Representatives...........     9
    Written Statement............................................    10

Statement by Representative Jerry F. Costello, Acting Ranking 
  Member, Subcommittee on Space and Aeronautics, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..    11
    Written Statement............................................    12

                               Witnesses:

Dr. George Nield, Associate Administrator for Commercial Space 
  Transportation, Federal Aviation Administration
    Oral Statement...............................................    13
    Written Statement............................................    16

Capt. Wilbur C. Trafton (USN Ret.), Chairman, Commercial Space 
  Transportation Advisory Committee
    Oral Statement...............................................    23
    Written Statement............................................    24

Discussion
  ...............................................................    31

  ...............................................................      

             Appendix I: Answers to Post-Hearing Questions

Dr. George Nield, Associate Administrator for Commercial Space 
  Transportation, Federal Aviation Administration................    44

Capt. Wilbur C. Trafton (USN Ret.), Chairman, Commercial Space 
  Transportation Advisory Committee..............................    53

 
                      AN OVERVIEW OF THE OFFICE OF
                   COMMERCIAL SPACE TRANSPORTATION'S
                      BUDGET FOR FISCAL YEAR 2013

                              ----------                              


                        TUESDAY, MARCH 20, 2012

                  House of Representatives,
                      Subcommittee on Space and Aeronautics
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Steven 
Palazzo [Chairman of the Subcommittee] presiding.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Chairman Palazzo. The Subcommittee on Space and Aeronautics 
will come to order.
    Good morning. Welcome to today's hearing entitled ``An 
Overview of the Office of Commercial Space Transportation's 
Budget for Fiscal Year 2013.'' In front of you are packets 
containing the written testimony, biographies and Truth in 
Testimony disclosures for today's witness panel. At this time I 
recognize myself for five minutes for an opening statement.
    Welcome to today's hearing on the President's 2013 budget 
request for the FAA Office of Commercial Space Transportation. 
I want to thank our witnesses, Dr. George Nield and Captain 
Wilbur Trafton, for joining us. I know that many people put in 
a lot of effort preparing for these hearings, and we appreciate 
you taking time from your busy schedules to appear before the 
Subcommittee. I also want to assure you that we greatly value 
your expertise and wisdom, and your testimony will benefit this 
Committee in the weeks and months ahead as we endeavor to 
better improve the policies that will guide our Nation's 
evolving commercial space program.
    The Office of Commercial Space Transportation, known as 
AST, has successfully licensed over 200 launches since 1984 
without loss of life, serious injury or property damage to the 
general public, which is a notable record in this inherently 
risky business. AST's mission is to ensure the protection of 
the public, property, and the national security and foreign 
policy interests of the United States during commercial launch 
or reentry activities.
    Currently, AST has 14 active launch licenses and eight 
spaceport licenses, and is working with SpaceX and Orbital 
Sciences for the upcoming NASA COTS and Commercial Resupply 
Services missions. Additionally, AST is coordinating with NASA 
for licensing the Suborbital Flight Opportunities Program as 
well as working toward the day when commercial crew 
demonstration flights will begin.
    The AST budget proposal for fiscal year 2013 includes a two 
percent increase, which is intended to allow AST to double the 
number of staff in field offices in anticipation of potentially 
up to 40 launch and reentry operations in 2013. This 
significant increase reflects several launches for ISS cargo 
resupply, and long-anticipated flights in the suborbital 
tourism market.
    The recently passed FAA reauthorization bill includes an 
extension of the regulatory moratorium on commercial human 
spaceflight systems to October 2015. It is my hope that FAA 
will use this time to engage with industry stakeholders on its 
regulatory approach and licensing standards to prepare the path 
forward for a proposed rulemaking. It is also critical that a 
delineation of roles and responsibilities among FAA's various 
offices be clearly articulated to ensure that industry won't be 
hindered by duplication or ambiguous requirements.
    With these developments in mind, I do have some concerns 
with NASA's use of Space Act Agreements inasmuch as they cannot 
impose safety requirements on program participants. And 
considering that FAA will not be able to promulgate human 
spaceflight regulations for several years, I realize that AST 
has a significant amount of work ahead as it endeavors to align 
its regulatory approach with evolving industry approaches to 
safety, all the while having to comply with the moratorium. We 
will be closely monitoring the collaboration between FAA and 
NASA in this area to ensure these agencies avoid conflicting or 
duplication of responsibilities while balancing authority for 
commercial space operations on NASA missions.
    I am pleased to note that AST is working closely with range 
partners at the Wallops Flight Facility, the U.S. Air Force at 
the Eastern and Western Ranges, and NASA offices at Johnson 
Space Center and Kennedy. These relationships help accomplish 
our national objectives to further NASA priorities with 
commercial space industry support.
    AST also carries the dual mission to encourage, facilitate 
and promote the U.S. commercial space transportation industry. 
While I trust that safety is the highest priority for this 
agency, I would like to better understand how AST balances this 
dual mission. This is especially important when evaluating the 
responsibility that AST shares with the Aviation Safety branch 
of the FAA on newly developed hybrid vehicles that will share 
the National Airspace System with transport and general 
aviation aircraft.
    The AST budget also proposes funding for the Center of 
Excellence for Commercial Space Transportation. Described as a 
cost-sharing partnership of academia, industry and government 
entities focusing on research of primary interest to AST and 
U.S. commercial space industry, the Center of Excellence is a 
consortium of eight universities. While it has been funded for 
the past two years from the FAA's R&D account, AST now plans to 
include this $1 million operation to its base budget. I am 
happy to see this office engage with the best and brightest 
minds in our universities, and I look forward to learning more 
about research projects, outcomes and contributions the 
consortium is achieving to help advance the role of commercial 
space.
    As I close, I would like to commend Dr. Nield and his 
agency on AST's impressive safety record. While I understand 
that AST's core business operations focus on maintaining this 
record, there are numerous challenges ahead as the industry 
anticipates a period of high growth. Keeping in mind 
interagency coordination, budgets, the vagueness of the 
marketplace, and an eager emergent industry, the upcoming years 
are sure to offer exciting innovations as we work to maintain 
U.S. leadership in space.
    [The prepared statement of Mr. Palazzo follows:]

     Prepared Statement of Subcommittee Chairman Steven M. Palazzo
    Good morning and welcome to today's hearing on the President's 2013 
budget request for the FAA Office of Commercial Space Transportation. I 
want to thank our witnesses, Dr. George Nield and Cpt. Wilbur Trafton, 
for joining us. I know that many people put in a lot of effort 
preparing for these hearings, and we appreciate you taking time from 
your busy schedules to appear before the Subcommittee. I also want to 
assure you that we greatly value your expertise and wisdom, and your 
testimony will benefit this Committee in the weeks and months ahead as 
we endeavor to better improve the policies that will guide our nation's 
evolving commercial space program.
    The Office of Commercial Space Transportation, known as AST, has 
successfully licensed over 200 launches since 1984 without loss of 
life, serious injury or property damage to the general public, which is 
a notable record in this inherently risky business. AST's mission is to 
ensure the protection of the public, property, and the national 
security and foreign policy interests of the United States during 
commercial launch or reentry activities.
    Currently AST has 14 active launch licenses and eight spaceport 
licenses, and is working with SpaceX and Orbital Sciences for the 
upcoming NASA COTS and Commercial Resupply Services missions. 
Additionally, AST is coordinating with NASA for licensing the 
Suborbital Flight Opportunities Program as well as working toward the 
day when commercial crew demonstration flights will begin.
    The AST budget proposal for Fiscal Year 2013 includes a 2% 
increase, which is intended to allow AST to double the number of staff 
in field offices in anticipation of potentially up to 40 launch and 
reentry operations in 2013. This significant increase reflects several 
launches for ISS cargo resupply, and long- anticipated flights in the 
suborbital tourism market.
    The recently passed FAA reauthorization bill includes an extension 
of the regulatory moratorium on commercial human spaceflight systems to 
October 2015. It is my hope that FAA will use this time to engage with 
industry stakeholders on its regulatory approach and licensing 
standards to prepare the path forward for a proposed rulemaking. It is 
also critical that a delineation of roles and responsibilities among 
FAA's various offices be clearly articulated to ensure that industry 
won't be hindered by duplicative or ambiguous requirements.
    With these developments in mind, I do have some concerns with 
NASA's use of Space Act Agreements inasmuch as they cannot impose 
safety requirements on program participants. And considering that FAA 
will not be able to promulgate human spaceflight regulations for 
several years, I realize that AST has a significant amount of work 
ahead as it endeavors to align its regulatory approach with evolving 
industry approaches to safety, all the while having to comply with the 
moratorium. We will be closely monitoring the collaboration between FAA 
and NASA in this area to ensure these agencies avoid conflicting or 
duplicative responsibilities while balancing authority for commercial 
space operations on NASA missions.
    I am pleased to note that AST is working closely with range 
partners at the Wallops Flight Facility, the US Air Force at the 
Eastern and Western Ranges, and NASA offices at Johnson Space Center 
and Kennedy. These relationships help accomplish our national 
objectives to further NASA priorities with commercial space industry 
support.
    AST also carries the dual mission to ``encourage, facilitate and 
promote'' the U.S. commercial space transportation industry. While I 
trust that safety is the highest priority for this agency, I would like 
to better understand how AST balances this dual mission. This is 
especially important when evaluating the responsibility that AST shares 
with the Aviation Safety branch of the FAA on newly developed hybrid 
vehicles that will share the National Airspace System with transport 
and general aviation aircraft.
    The AST budget also proposes funding for the Center of Excellence 
for Commercial Space Transportation. Described as a cost sharing 
partnership of academia, industry and government entities focusing on 
research of primary interest to AST and US commercial space industry, 
the Center of Excellence is a consortium of eight universities. While 
it has been funded for the past two years from the FAA's RE&D account, 
AST now plans to include this 1 million dollar operation to its base 
budget. I am happy to see this office engage with the best and 
brightest minds in our universities, and I look forward to learning 
more about research projects, outcomes and contributions the consortium 
is achieving to help advance the role of commercial space.
    As I close, I'd like to commend Dr. Nield on AST's impressive 
safety record. While I understand that their core business operations 
focus on maintaining this record, there are numerous challenges ahead 
as the industry anticipates a period of high growth. Keeping in mind 
interagency coordination, budgets, the vagaries of the marketplace, and 
an eager emergent industry, the upcoming years are sure to offer 
exciting innovations as we work to maintain US leadership in space.
I now recognize Ranking Member Jerry Costello, for his opening 
statement.

    Chairman Palazzo. I now recognize our Ranking Member, Jerry 
Costello, for his opening statement.
    Mr. Costello. Mr. Chairman, thank you, and Mr. Chairman, I 
thank you for holding today's hearing to review the fiscal year 
2013 budget request for the FAA's Office of Commercial Space 
Transportation.
    The successful growth of commercial human spaceflight 
activities can open new opportunities for commercial space. 
However, realizing and sustaining the promise of that industry 
will require close attention to safety.
    As Ranking Member of the Committee on Transportation and 
Infrastructure, the Subcommittee on Aviation, I have a great 
appreciation, I think, for the expectations of the flying 
public. The public needs a clear understanding of the risks 
involved with commercial space transportation, and it will need 
to be convinced those risks are being effectively managed.
    AST will be at the center of establishing those 
expectations, as it will have a critical role in ensuring the 
safety of would-be space tourists, and potentially even of NASA 
astronauts or other spaceflight participants.
    Although commercial human spaceflight vehicles are in 
varying stages of design and development, important policy 
questions have yet to be resolved. To name a few: How will 
safety regulations be developed? Two, will the government 
extend liability protection to the new industry? Three, how 
will the safety of commercial operations on orbit be managed? 
And is AST's role as both a regulator and promoter of the 
commercial spaceflight industry, is that an appropriate role 
for the agency?
    Mr. Chairman, I hope this is the first of many discussions 
that Congress and the FAA and key stakeholders will have to 
address these important policy issues. I look forward to 
hearing from the Associate Administrator on the challenges 
facing the AST and what actions, if any, are needed to help 
address those challenges.
    In addition, I am interested in hearing the perspectives on 
AST's roles and responsibilities, especially in light of his 
past experience in leading NASA's human spaceflight activities. 
I am very interested in hearing Captain Trafton's perspective 
on these issues.
    Mr. Chairman, I thank you for yielding the time to me and I 
look forward to hearing the testimony of our witnesses, and 
certainly I have some questions for them after their testimony.
    [The prepared statement of Mr. Costello follows:]
     Prepared Statement of Acting Ranking Member Jerry F. Costello
    Mr. Chairman, thank you for holding today's hearing to review the 
Fiscal Year 2013 (FY13) budget request for the Federal Aviation 
Administration's (FAA's) Office of Commercial Space Transportation 
(AST).
    The successful growth of commercial human spaceflight activities 
can open new opportunities for commercial space, and I think we all 
hope for a vibrant future for the industry.
    However, realizing and sustaining the promise of that industry will 
require close attention to safety.
    As Ranking Member of the Transportation and Infrastructure's 
Subcommittee on Aviation, I have a good appreciation of the 
expectations of the flying public.
    The public needs a clear understanding of the risks involved with 
commercial space transportation, and it will need to be convinced those 
risks are being effectively managed.
    FAA's Office of Commercial Space Transportation--AST--will be at 
the center of establishing those expectations, as it will have a 
critical role in ensuring the safety of would-be space tourists, and 
potentially even of NASA astronauts or other spaceflight participants.
    Although commercial human spaceflight vehicles are in varying 
stages of design and development, important policy questions have yet 
to be resolved. To name a few:

      How will safety regulations be developed?

      Will the Government extend liability and indemnification 
protection to the new industry?

      How will the safety of commercial operations on-orbit be 
managed?

      Is AST's role as both a regulator and promoter of the 
commercial spaceflight industry still appropriate?

    Mr. Chairman, I hope this is the first of many discussions that 
Congress, the FAA, and key stakeholders will have to address these 
important policy issues.
    I look forward to hearing from Associate Administrator Nield on the 
challenges facing the AST and what actions, if any, are needed to help 
address those challenges.
    In addition, I am interested in hearing Mr. Trafton's perspectives 
on AST's roles and responsibilities, especially in light of his past 
experience in leading NASA's human spaceflight activities.
Thank you, Mr. Chairman, and I yield back the balance of my time.

    Chairman Palazzo. Thank you, Mr. Costello.
    If there are Members who wish to submit additional opening 
statements, your statements will be added to the record at this 
point.
    At this time I would like to introduce our panel of 
witnesses, and then we will proceed to hear from each of them 
in order.
    Our first witness is Dr. George Nield, Associate 
Administrator for Commercial Space Transportation at the 
Federal Aviation Administration. Dr. Nield is a graduate of the 
U.S. Air Force Academy and has over 30 years of aerospace 
experience with the Air Force, NASA and in private industry. 
Dr. Nield came to FAA from the Orbital Sciences Corporation, 
where he served as Senior Scientist for the Advanced Programs 
Group.
    Next, we will hear from retired United States Navy Captain 
Wilbur Trafton, who is Chairman of the Commercial Space 
Advisory Committee. Captain Trafton is a graduate of the U.S. 
Naval Academy. He served 26 years in the Navy, flying combat 
missions in Southeast Asia and serving in command positions. He 
also has extensive experience in industry and served as 
Associate Administrator for Spaceflight at NASA. Captain, thank 
you for joining us this morning.
    Thanks again to everybody here, and as our witnesses should 
know, spoken testimony is limited to five minutes each. After 
all witnesses have spoken, Members of the Committee will have 
five minutes each to ask questions.
    I now recognize as our first witness, Dr. George Nield, to 
present his testimony.

               STATEMENT OF DR. GEORGE C. NIELD,

          ASSOCIATE ADMINISTRATOR FOR COMMERCIAL SPACE

     TRANSPORTATION OF THE FEDERAL AVIATION ADMINISTRATION

    Dr. Nield. Chairman Palazzo, Ranking Member Costello and 
distinguished Members of the Committee, thank you for inviting 
me to meet with you today to update you on the ongoing 
activities in commercial space transportation by the Federal 
Aviation Administration and on some of the recent developments 
in the industry.
    With NASA's retirement of the space shuttle, we are 
undergoing a historic change in the U.S. space program. The 
final mission of Atlantis in July of last year left many 
wondering about the future of space transportation in this 
country. While it is certainly true that the launch marked the 
end of an era, it also represented the beginning of what I am 
confident will be an exciting future for our Nation in space. 
Today, I would like to give you my perspective on that future 
and to highlight some of the ways that the FAA and the 
commercial space transportation industry are dealing with the 
challenges that we will be facing in the years ahead.
    The FAA Office of Commercial Space Transportation has a 
twofold mission: to ensure public safety during commercial 
launch and reentry activities, and to encourage, facilitate and 
promote commercial space transportation. To carry out our 
safety responsibilities, we develop and issue regulations, 
grant licenses, permits and safety approvals, and conduct 
safety inspections during each and every licensed or permitted 
launch.
    We are also responsible for licensing the operation of 
launch and reentry sites, or spaceports, as they are popularly 
known. Since 1996, we have licensed the operation of eight 
different spaceports around the country.
    I am very proud of the men and women who work in our office 
and of our outstanding safety record. Since 1989, we have 
licensed 205 launches without any loss of life, serious 
injuries or significant property damage to the general public.
    Currently, as you know, the United States must rely on 
other nations to deliver supplies to our astronauts onboard the 
International Space Station. Over the next several months, two 
different American companies, SpaceX and Orbital Sciences 
Corporation, are planning to demonstrate their ability to take 
on that responsibility. Those missions will be licensed by the 
FAA. And we are working with both companies and with NASA to 
ensure their success.
    While it may well be several years before we see U.S. 
rockets carrying people again all the way to orbit, there is 
plenty of work going on right now that is aimed at ending our 
reliance on foreign entities to transport crew members to and 
from the International Space Station. American companies are 
eager to show that they can do the job as part of the 
Commercial Crew Development program. The FAA is working 
directly with the interested companies and with NASA to ensure 
public safety during those launches whenever they take place.
    Suborbital space tourism represents another important 
segment of the industry. Several companies are currently in the 
process of designing, building and testing vehicles that will 
be capable of carrying people up to the edge of space with 
maximum altitudes in excess of 100 kilometers. Based on market 
studies, we expect to see this type of activity result in a 
billion-dollar industry within the next 10 years.
    To support these and other activities, the President's 
fiscal year 2013 budget request for our office is $16.7 
million, which provides for the equivalent of 73 full-time 
employees. Our fiscal year 2013 request represents an increase 
of $429,000 over our fiscal year 2012 enacted budget.
    Based on industry launch manifests and planned flight test 
programs, we are forecasting a significant increase in launch 
and reentry operations in 2013. We are also performing initial 
safety analyses for some of the new launch systems that are 
planned to be operational next year. The FAA stands ready to 
support our future in commercial space transportation. With 
your help and leadership, that future will not only inspire the 
Nation, it will also create new jobs, produce new technologies 
and expand our reach into the universe.
    Again, I am honored by this opportunity to come before you 
today, and I look forward to answering any questions that you 
may have.
    [The prepared statement of Dr. Nield follows:]
  Prepared Statement of Dr. George Nield, Associate Administrator for 
    Commercial Space Transportation, Federal Aviation Administration



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Chairman Palazzo. Thank you, Dr. Nield.
    I now recognize Captain Trafton for five minutes to present 
his testimony.

      STATEMENT OF CAPTAIN WILBUR C. TRAFTON, USN (RET.),

  CHAIRMAN, COMMERCIAL SPACE TRANSPORTATION ADVISORY COMMITTEE

    Captain Trafton. Thank you, Chairman Palazzo, Congressman 
Costello and Members of the Subcommittee. I appreciate the 
invitation to participate in this hearing today regarding the 
FAA AST budget request for 2013.
    I am here in my role as Chairman of the Commercial Space 
Transportation Advisory Committee, as you know. COMSTAC 
provides information, advice and recommendations to the 
Administrator of the FAA within the Department of 
Transportation on critical matters concerning the U.S. 
commercial space transportation industry.
    COMSTAC membership is made up of senior executives from the 
commercial space transportation industry, representatives from 
the satellite industry, both manufacturers and users, state and 
local government officials, representatives from firms 
providing insurance, financial and legal services for 
commercial space activities, and representatives from academia, 
space advocacy organizations and industry organizations. We 
meet twice a year in May and October in Washington, D.C., in a 
public forum. The primary goals of this Committee are to 
evaluate economic, technological and institutional developments 
relating to the U.S. commercial transportation industry, 
provide a forum for the discussion of problems involving the 
relationship between industry activities and government 
requirements, make recommendations to the Administrator on 
issues and approaches for federal policies and programs 
regarding the industry.
    The commercial space industry represents the spirit and 
roots of America, exploration and entrepreneurship. The 
commercial industry plays an important role in stimulating 
investment in infrastructure and creating opportunity, jobs and 
ultimately a U.S. capability, increasing value to the U.S. 
taxpayer. This role is increasingly important as commercial 
space passenger travel emerges as a new business.
    I am not going to read the rest of the statement. I thought 
the questions that were asked of me in the invitation letter, 
are right on the mark, and I have answered them as you can see 
to the best of my ability, and the Committee's ability.
    A few wrap-up remarks. Commercial space is here to stay. 
There are those, particularly some astronauts, who don't agree 
with that, and everyone is entitled to their opinion. I found 
it interesting on 60 Minutes Sunday night that they only chose 
two astronauts who don't like commercial space and didn't 
choose a couple who feel the other way. Some areas requiring 
immediate action, and this is from COMSTAC, and I will be 
prepared to answer your questions and discuss these with you: 
cooperation with NASA, regulations, cargo missions, crew 
missions, who regulates, who operates, AST resources, does AST 
have the resources to handle the workload that is coming, and 
there is an increase in workload coming, indemnification, it 
has to be extended at least for a year. On balance, that is the 
best thing for the industry, for the country, and we at COMSTAC 
would just like to get that behind us as soon as possible.
    On-orbit authority I understand where the Committee is 
coming from but everybody in the room needs to understand that 
once on-orbit authority is given, AST isn't going to be able to 
suddenly step up with regulations, policies. It is going to be 
several years before AST is up to speed in regulating the 
industry.
    Export controls need some work, and I am prepared to 
discuss that.
    I think that the entrepreneurs that are working the 
suborbital world are doing a great thing for our country, and I 
will say the United States, Russia, China and SpaceX, if you 
watched the other night, think about that. Three countries and 
one U.S. company have put a capsule up and then brought it back 
to Earth.
    That completes my remarks, sir, and I am ready to answer 
your questions.
    [The prepared statement of Captain Trafton follows:]
  Prepared Statement of Capt. Wilbur C. Trafton (USN Ret.), Chairman, 
           Commercial Space Transportation Advisory Committee



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Chairman Palazzo. Thank you, Captain Trafton. I thank the 
panel for their testimony, reminding Members that Committee 
rules limit questioning to five minutes. The Chair will at this 
point open the round of questions. The Chair recognizes himself 
five minutes.
    Dr. Nield, this is actually a three-part question. What 
will be AST's approach to regulating orbital and suborbital 
crew launch systems? How will AST's regulatory regime differ 
from requirements NASA imposes on launch systems that may be 
contracted to carry NASA astronauts? And finally, will AST's 
approach distinguish between orbital and suborbital launch 
systems or will it be the same basic set of requirements? And I 
will go back to the first question, the first part. What will 
be AST's approach to regulating orbital and suborbital crew 
launch systems?
    Dr. Nield. Thank you, Mr. Chairman. Our approach for 
overseeing the launches that we have coming up consists of 
looking at both the impact on public safety and the impact on 
crew members and spaceflight participants. In terms of the 
public safety, we have our regulatory framework in place today. 
We have a good safety record. We have a licensing and 
permitting scheme that we believe has done a good job of 
ensuring their continued safety. What is new, as you point out, 
is carrying people onboard these rockets, and we have some very 
top-level regulations which Congress asked us to develop 
following the Commercial Spaceflight Amendments Act of 2004. 
However, in conjunction with that legislation and the recent 
FAA authorization, we were asked to hold off on additional 
regulations that were designed to ensure the safety of crew 
members or spaceflight participants until, as you mentioned, 
October 1, 2015.
    So our approach at this point is to continue to work with 
industry, with NASA and with other key stakeholders to 
understand what kinds of things would make sense for a 
regulatory environment so that when the learning period is 
over, when we have gained additional experience in these types 
of flights. Then we would be prepared to put in place a 
regulatory system that is rational, would maximize our safety 
and would not be a burden to the industry.
    In terms of what is different with NASA, NASA is free to 
impose whatever requirements it believes are appropriate for 
its NASA astronauts, and it can do that through the contracts 
that it has with industry. Our focus today is on public safety. 
We want to work with NASA, though, to make sure that none of 
our requirements are either conflicting or otherwise confusing 
the requirements that NASA wants to put in place. That will be 
very important to ensure that the government is consistent with 
its requirements.
    In terms of the differences between orbital and suborbital, 
our basic approach is the same but because those environments 
are so different, I think we have the opportunity to be a 
little bit more methodical with suborbital space flight. That 
is a lot more like aircraft flight test where you are expanding 
the envelope, you can take it flight by flight, step by step in 
terms of the speeds, the altitudes and the amount of time that 
the crew and spaceflight participants are exposed to the 
hazards of space is relatively short. For orbital flights, once 
you have left the pad, you are going and it is probably going 
to be days or even weeks that you are exposed to that harsh 
environment. So I think it will be very important that we have 
a good sense of requirements as we come up on orbital 
spaceflight. The suborbital flight, I think the framework that 
Congress has put in place with informed consent and a step-by-
step evolutionary process will be very adequate.
    Chairman Palazzo. Dr. Nield, this question is also for you. 
On March 9, 2012, just 11 days ago, your office published in 
the Federal Register a request for proposals for the Space 
Transportation Infrastructure Matching Grants program. How 
would your office fund grant applications given there is no 
funding identified in fiscal year 2012?
    Dr. Nield. I believe that the spaceport matching grants 
program is a very effective program. We have given $500,000 in 
each of two years in 2010 and 2011. The first year was 
specifically at the direction of the Congress. Last year and 
potentially this year, if we give out those grant funds, it 
would be basically taking out of our hide in terms of the 
amount that we already have available. But we think that the 
FAA has a very great model in terms of the Airport Improvement 
Grant program that is very successful in helping our national 
infrastructure to be modernized and fully equipped to meet our 
needs for aviation transportation. As we move forward with 
commercial space transportation, we think similar models--where 
you have matching grants, some federal funding and some from 
local or private entities--would enable us to maximize safety 
and help the national infrastructure to be prepared for the 
future.
    Unfortunately, in the current tough economic times, we have 
to prioritize all of our activities, and so looking forward, 
you will notice that we are not asking for funding in 2013 for 
the grants program. We think it would make sense to continue to 
look at that in the future to see if that is something that we 
are able to accommodate, but we would not be able to give out 
grants in 2013, according to our current plans.
    Chairman Palazzo. But just to finish up, on the 
documentation that I am looking at, there is no money set aside 
for spaceport grants in 2012. So we are putting out a proposal 
for applications but there is no money available, or do you 
have money that has not been used from prior periods?
    Dr. Nield. So to answer that, in the Federal Register 
notice, we warned people that we may not be able to have funds 
available. However, we are carefully managing our resources 
this year as we go through the year to see if we might be able 
to have some small amount available.
    Chairman Palazzo. And were the funds available, in your 
view, would space transportation grants take priority over your 
other regulatory and safety responsibilities?
    Dr. Nield. I would have to say safety is number one, but 
the grants can be very important in terms of helping the 
industry to be safe and mature going forward.
    Chairman Palazzo. Okay. Thank you. My time is up.
    Mr. Costello?
    Mr. Costello. Thank you, Mr. Chairman.
    Captain Trafton, in your opinion, is the AST budget request 
for fiscal year 2013 adequate to carry out their mission?
    Captain Trafton. Mr. Costello, yes, sir, I think it is. As 
I mentioned, we see a tremendous workload coming for AST. When 
one looks at the suborbital and orbital flights on the horizon, 
and yes, I know, that the numbers aren't there if you look 
back, but if you look forward, they certainly are there, and 
some companies are talking about flying 30 times a year, and 
when you put that package together and you look at all the pre-
license issue work that needs to be done to lay the groundwork 
and the meetings and then finally issue the license and then 
follow the license, issuing a license isn't the end of their 
activity. So I think it is extremely important that AST be 
funded to perform their regulatory role and I absolutely think 
that their budget request for 2013 is justified.
    Mr. Costello. In your opinion, what should AST's priorities 
be for fiscal year 2013?
    Captain Trafton. Well, Dr. Nield has already said it. The 
priority is safety always. The work with NASA, the 
collaboration with NASA is extremely important, and I have to 
say in the interest of full disclosure, I sit on the NASA 
Commercial Space Committee, and it has gotten very interesting. 
We never have a meeting on this committee or that committee 
that we don't talk about the relationship between NASA and the 
FAA, and it is interesting that we are of one opinion on both 
sides. The FAA will be the regulatory agency for crew and cargo 
missions, suborbital and orbital. Yes, we need to work the hard 
details with NASA but that is a given from these two 
committees.
    Again, just looking forward, I can count 40 flights right 
on the horizon, five traditional ELVs, five cargo to ISS, 20 
suborbital research and 10 Virgin Galactic, for example, 
tourism flights. So there's 40 right on the horizon. So I think 
they need to be plussed up.
    Mr. Costello. Thank you.
    Dr. Nield, you made mention that in the FAA 
reauthorization, in the Act that was passed recently, the 
reauthorization, it postpones AST's ability to regulate until 
October of 2015, but there is a statement, of course, that is 
attached to that that does not prohibit AST from moving 
forward. So I guess my question is, what is AST doing at the 
present time regarding the authority that the reauthorization 
bill gives you?
    Dr. Nield. So we are still looking at that legislation and 
discussing it with our counsel to understand exactly what we 
can and cannot do. We very much appreciate the guidance from 
Congress that encourages us to work with industry because we 
believe that is very important to getting these regulations 
correct.
    In terms of what we are doing right now, frankly, we are 
going through line by line all of the extensive requirements 
that NASA has developed for its own human rating requirement 
set, and we are looking at which of those would be applicable 
to non-NASA missions and we are going through for each 
discipline and trying to understand what would that look like 
if we weren't supporting NASA for the International Space 
Station. So that is a work in progress.
    The worst thing that could happen, I think, would be for us 
to just sit back and when an accident occurs if we would 
scramble around and try to put some regulations in place. That 
is not the right solution. So it is very important that we work 
with all the stakeholders--industry, NASA and the other 
interested parties--now to start developing what that 
regulatory framework would look like, and when it is right, 
then we will be ready to go forward.
    Mr. Costello. Thank you.
    Finally, Captain Trafton, you make mention in your 
statement about recommendations for government and industry to 
share information and transparency, how important it is. I am 
pleased to hear you say that NASA and the FAA are working close 
together. On my other hat with the Subcommittee on Aviation of 
Transportation and Infrastructure, we had a problem when it 
came to trying to get agencies to work together concerning 
NextGen, and not always did we have the cooperation not only of 
the agencies working together but of the stakeholders working 
together. So I guess my question to you is, do you have a model 
in mind for a system to exchange data between the governmental 
agencies and industry?
    Captain Trafton. No, sir. The short answer is no, I don't 
have a model in mind. We have discussed this subject at length 
within the COMSTAC. It is clear to us that there has to be an 
exchange of safety information. AST has a lot of safety 
background, experience, information that they can share as does 
NASA. So we know it is there. We know they need to share it. We 
have talked about in our recommendations to Dr. Nield but we 
don't have a model yet.
    Mr. Costello. Well, I hope sooner rather than later that 
there is a model that is developed, and as I said, I think as 
far as transparency and governmental agencies working together 
with private industry concerning NextGen, we had some bumps in 
the road early on but I think many of those have been worked 
out. So I hope we don't repeat that regarding this program.
    So with that, Mr. Chairman, thank you.
    Chairman Palazzo. The Chair now recognizes Mr. Brooks from 
Alabama.
    Mr. Brooks. Thank you, Mr. Chairman.
    Dr. Nield, I am looking at Committee staff notes, and they 
say ``AST issued its first launch license in 1989 and since 
then has licensed 205 launches with no fatalities, serious 
injuries or significant damage to the uninvolved public.'' Is 
that an accurate statement?
    Dr. Nield. Yes, it is, Mr. Brooks.
    Mr. Brooks. And then they also give me notes that state 
that ``During the previous year, only one launch license was 
issued.'' Is that correct?
    Dr. Nield. It depends on how you count the events and what 
fiscal years you are talking about. For example, this hearing 
is designed to look at the fiscal years, so if we look at the 
last fiscal year, 2011, then we had actually five launches of 
which three were licensed and two were permitted. So we have 
all those numbers available and can answer which particular 
question that you had in mind.
    Mr. Brooks. And if I understand it correctly, your budget 
request assumes dramatic growth in the launch rate during the 
coming fiscal year, noting that up to 40 launches and reentries 
could occur. Is that a fair characterization by Committee 
staff?
    Dr. Nield. Yes, sir, it is.
    Mr. Brooks. What is it that causes you to believe that we 
would have a jump of, say, five launches and two or three 
licenses up to as many as 40?
    Dr. Nield. The factors that go into that assessment are 
that this is a new and growing industry. If you look at the 
last 25 years, almost all the launches were for the same basic 
purpose: to launch a satellite such as a telecommunications 
satellite into orbit. And the level of business for that part 
of the industry is continuing today and we expect it will 
continue going forward without much change. But there are 
several new segments that we see just on the horizon that we 
think will greatly increase the activity, and so those include 
the commercial cargo flights to the space station to support 
NASA. That is something we have never had before. NASA has 
contracts for $3-1/2 billion for those two companies to provide 
those 20 flights over the next few years, so we know that is 
going to start soon, probably this year. We have the commercial 
cargo flights, again in support of NASA. We also have the 
suborbital activities both for scientific research and for 
space tourism. And all of those segments are starting. We have 
got companies actually making designs, building hardware, 
assembling things and conducting tests. So exactly when those 
launches will start is hard to predict but it looks very, very 
clear that it is going to be in the next one to two years. So 
that is the basis for our projections.
    Mr. Brooks. With respect to fiscal year 2012, how many 
launches have already occurred that required oversight by the 
Office of Commercial Space Transportation?
    Dr. Nield. None so far.
    Mr. Brooks. So that would be none over the past five 
months?
    Dr. Nield. That is correct.
    Mr. Brooks. And we have seven more months in this fiscal 
year. How many launches are currently on the calendar with set 
dates?
    Dr. Nield. That is a great question. For industry, we don't 
have publicly published launch dates the way we are used to 
seeing them for government operations, but as we talk to the 
various companies, I think it is quite possible we will get to 
10 to 12 launches by the end of the year, and----
    Mr. Brooks. So you think we will have 10 to 12 launches 
over the next seven months?
    Dr. Nield. Yes, sir.
    Mr. Brooks. Now, your budget, as I understand it, for 
fiscal year 2011 was roughly $15 million. During that time 
frame, we have four or five launches, if I understand you 
correctly. And fiscal year 2012 enacted is a little over $16 
million, and if I understand it, you are now looking at eight, 
nine, 10, 11, 12, somewhere in that neighborhood, for the 
remainder of this fiscal year, although so far for the first 
five months we have had zero. And yet you are testifying that 
it is going to jump up to around 40, far more than historical 
averages, for fiscal year 2013, but you are having a requested 
only 2.6 percent increase in your budget. How is that going to 
work where you have a 2.6 percent increase in your budget 
request but you are looking at four times as many launches as 
the historical average?
    Dr. Nield. It is going to be a significant challenge. The 
way we hope to accomplish that is by working efficiently, by 
using this time when we have had few launches to set up the 
organization, to do training, to develop policies, to be ready 
to go so that when the activity starts to build, we are 
prepared to do that.
    There are many different metrics that go into deciding how 
many resources we really need to accomplish the job. Launches 
is one of those but there are other things too--how many 
applications for licenses, how many for permits, how many field 
offices do we have, how many regulatory rulemaking activities 
are underway and so forth. So we have tried to develop a 
staffing model that will help us get a sense for that, and we 
are starting to use that to provide our request to the 
committee.
    Mr. Brooks. Thank you, Dr. Nield, and if the chairman will 
excuse me, I have got a concurrent Armed Services Committee 
meeting.
    Chairman Palazzo. Thank you.
    The Chair now recognizes Ms. Edwards from Maryland.
    Ms. Edwards. Thank you, Mr. Chairman, and thank you, 
gentlemen, for your testimony.
    In a couple of iterations on this Subcommittee, I have had 
questions regarding liability and indemnification for 
commercial space launch, and so I want to focus on that for the 
time being.
    Dr. Nield, the government-industry shared liability and 
indemnification regime for commercial launch systems, whether 
that is unmanned satellite launches or ones that could carry 
passengers under the Commercial Space Launch Amendments Act, is 
set to expire on December 31st of this year. What, if any, 
changes to the regime are needed in light of the evolution of 
commercial space transportation?
    Dr. Nield. That is an excellent question. With your 
permission, I would like to just talk a little bit about 
indemnification itself because----
    Ms. Edwards. Just remember that I only have five minutes. 
Thank you, though.
    Dr. Nield. Okay. This is a very important question. Perhaps 
we can discuss it in further questions. To get right to the 
issue that you are asking about, the recommendations that 
COMSTAC, for example, has made relating to indemnification are 
that we consider having it renewed for more than a few years, 
perhaps ten years or even making it permanent, and lifting the 
cap, which is currently $1-1/2 billion. So those are the 
specific changes that have been proposed that could improve the 
system but I think in general we definitely need to extend the 
regime, and there are a number of reasons for that which I 
would be happy to discuss further later.
    Ms. Edwards. Let me just ask you that, and I apologize, I 
don't mean to cut you off. We just get these time limits and it 
drives us crazy. I am curious as to where the liability should 
be because--let us just separate unmanned from missions that 
would carry crew. Isn't it true that one part of that industry 
is fairly mature in terms of the technology? So why is it that 
on the commercial side, the taxpayers should basically enjoy 
pretty much all the risk and the companies engaged in the 
activity bear really not a lot of the risk?
    Dr. Nield. I would say that that would not be an accurate 
representation of the current situation. So if you go back to 
the terminology itself, the word ``indemnification'' really 
does not explain what the regime is that Congress has put in 
place. A more accurate assessment would be to call it a 
conditional payment of excess third-party claims. Now, briefly, 
what does that mean? It is conditional. Congress would have to 
appropriate funds after an accident before it would happen. It 
doesn't happen automatically. It is third party, so we are not 
talking about a wealthy space tourist getting reimbursed or his 
heirs. We are talking about protecting the general public's 
interest should they have damage or injury. And we are talking 
about excess payments. Our office does an assessment before 
each launch to develop a maximum probable loss, how much damage 
we think could happen during that launch. We set that as the 
amount of insurance that the company has to put in place and it 
is only if the accident exceeds that in terms of damage that 
this regime kicks in.
    So with that as the basis to understand it, do we need it? 
Yes, we think it is necessary for industry to be 
internationally competitive, and what is the cost to the 
taxpayer? Well, it has been in place since 1988. The cost has 
been zero.
    Ms. Edwards. But we are also entering a different 
environment for commercial launches too. It isn't the 
environment that we have been in since 1988. I mean, that is 
the whole premise of the budget that we are putting in place 
looking forward, and Captain Trafton's testimony and his belief 
is that there is a lot of fairly robust industry there, and so 
I guess although I understand the regime, my question just has 
much more to do with why is it that the industry itself fully 
doesn't bear the responsibility to the public in the event of 
an accident?
    Dr. Nield. I think it would be appropriate for Captain 
Trafton to respond, but my assessment is that this is a shared 
risk regime on purpose because of the high risk and the 
potential high damage that is involved.
    Ms. Edwards. Captain Trafton?
    Captain Trafton. Yes. Thank you, Ms. Edwards. First of all, 
as I stated earlier, COMSTAC would be perfectly happy if the 
Congress would extend indemnification for another year and then 
let us work the fine details, but we need it, and we need it to 
be competitive internationally. Everybody else has this. On 
balance, it is good for the United States, it is good for the 
U.S. industry, and it makes our industry competitive. And 
without it, our industry will suffer. Russia takes care of 
theirs. Europe takes care of theirs. China takes care of their 
launch providers. We need to do the same.
    Ms. Edwards. Thank you.
    Chairman Palazzo. Thank you, and also for the 
Subcommittee's personal knowledge, we are going to be having a 
hearing on indemnification in late spring, the latter half of 
May, and we are hoping to have the GAO, who is conducting an 
extensive analysis of the market right now to be able to come 
be one of our witnesses.
    At this time, the Chair recognizes Mr. Rohrabacher from 
California.
    Mr. Rohrabacher. Thank you very much. Just a little bit on 
limited liability, which is of course, I think, a very serious 
issue and should be discussed, but we should put this in 
perspective to new and developing industries as well as 
industries that we have. Certainly limited liability has been 
put in place for the nuclear industry, and we are about to step 
into a whole new era of nuclear power plants that are totally 
safe and will save our country. I mean, they will. But we would 
never have reached that stage if the early part of developing 
that industry if there wasn't limited liability. Let me note, 
we have limited liability for aviation for our airlines, and 
the airlines in the development of the airline business. That 
too I think we can be proud that we have come so far so quickly 
in the field of aviation.
    And let us also note that if we don't want the government 
to run everything, the government has limited liability, I 
mean, in everything it does, and, you know, correct me if I am 
wrong, but I don't believe NASA can be sued, and it is part of 
the United States government. So if we don't look at limited 
liability as something that is part of what we want to do to 
develop this new commercial industry, which will save the 
taxpayers enormous amounts of money, limited liability has to 
be part of that discussion.
    I was of course here and I am the author of the Commercial 
Space Launch Amendments Act of 2004, and I would like to note 
that we created a moratorium that we have on new restrictions 
to the industry to give the industry eight years not only to 
develop and design, test and evaluate new systems but also to 
gain significant flight experience. In addition, we designed 
this learning period to give ample time for the FAA to 
understand these systems and create needed regulations based on 
real data, not on speculation. At that time, if we had gone 
right into it, we would have been creating regulations and 
setting down the ground rules for things we didn't even know 
about yet because no one had ever done them. So what we need to 
do is to make sure that when we do get into this field, and I 
know there is an extension now of three more years, we haven't 
progressed as much as we thought we were going to, but after 3 
more years, let us make sure in these years we get the data we 
need to make sure that regulation that is justified and the 
structure that these private companies can operate under that 
we set up something that is workable, workable and safe, and if 
it is not safe, it is not workable. We know that.
    Just to get down to maybe things we might be doing, do you 
see NASA as a regulator of commercial launch systems, even in a 
situation when NASA is not the customer, doesn't bear any 
relationship to the economic deal that is being made?
    Dr. Nield. We are working very closely with NASA but in 
discussions with NASA leaders, NASA recognizes that they are 
not set up as a regulatory organization. That is the proper 
role for the FAA or similar agency. NASA has a lot of 
experience, a lot of expertise, and they are doing some great 
things, especially in exploration.
    Mr. Rohrabacher. Right. NASA has the leading role to play 
in space exploration. NASA has a leading role to play in 
pushing us and pushing back the frontiers. I don't see NASA as 
playing a leading role in regulating the economic activities of 
other entities in space, and there is a significant difference 
between the regulatory mission of AST protecting the uninvolved 
public and the regulatory mission of most of the rest of FAA. 
So how does this influence your office and how it operates as 
compared to the rest of the FAA?
    Dr. Nield. Like the rest of the FAA, we are focused on 
safety and we have a lot of experience and expertise that we 
can take advantage of in trying to apply to these new 
activities. What is different, though, about our industry is, 
it is a new industry. We don't have 100 years' worth of 
experience such that we have developed all the lessons learned, 
all the factors to look at, and we want as a Nation to 
encourage innovation, creativity, and to figure out how we can 
build safer, more reliable, more cost-effective vehicles in the 
future. So that is the balance that we want to try to achieve. 
Safety is number one, but let us allow some innovation.
    Mr. Rohrabacher. Mr. Chairman, I would suggest that we have 
done what is right. Sometimes you look back and Congress has 
done exactly the wrong thing to achieve the goals that they 
have set out, but we are doing this in a very systematic way 
and within a few years we have seen this commercial space group 
expand and the amount of money coming in to space activities 
from the commercial side expand. So if we just keep on this 
very responsible approach, I think we will have a great new 
industry for this country and for the world that we will be 
proud of.
    Thank you very much, Mr. Chairman.
    Chairman Palazzo. Thank you.
    The Chair now recognizes Ms. Adams from Florida.
    Mrs. Adams. Thank you, Mr. Chairman.
    I want to go back to, some of my colleagues were asking you 
questions, and I am trying to understand your rationale for 
what you believe is going to be, I believe you said 10 to 12 
launches over the next seven months. Because in 2009 you issued 
five experimental licenses to suborbital companies. In 2010, 
you issued four, and you issued zero in 2011. Your written 
testimony to this Committee in May of 2011, you stated ``In 
fiscal year 2012, we expect several dozen licensed or permitted 
launches. Although most of those missions will involve 
suborbital launches, it still would be quite a change.'' Now, 
you said you are still expecting those several dozen, or now it 
is 10 to 12, so are you still expecting a dozen this year, 
launches this year?
    Dr. Nield. Yes, ma'am.
    Mrs. Adams. How many licenses are currently on track to 
issue this year, for this fiscal year 2012?
    Dr. Nield. I don't have the number of licenses at my 
fingertips. I think it is important to look at the launches and 
the licenses as separate events. We can certainly get you that 
information.
    Mrs. Adams. So you don't know how many licenses are on 
track but you still believe seven to--10 to 12 over the next 
seven months?
    Dr. Nield. Yes.
    Mrs. Adams. But you can't quantify that with anything that 
you brought here today. Is that correct? Yes or no. I will move 
on to my other questions?
    Dr. Nield. It is a subjective issue. I am happy to give you 
my best guess.
    Mrs. Adams. I would like to see some actual figures, if you 
could.
    Dr. Nield. We can get you that.
    Mrs. Adams. That would be great. You know, the mission 
statement of AST is partially to encourage, facilitate and 
promote U.S. commercial space transportation. However, your 
mandate is to ensure the protection of public safety and 
property as well. Necessarily, this includes regulating and 
investigating violations of regulations in the industry. I have 
concerns about AST being both a regulator and a promoter of the 
commercial space industry. Can you tell the Committee your 
strategy to mitigate the conflict between these two parts of 
your mission as the commercial market continues to mature?
    Dr. Nield. Yes, I would be happy to. Safety is number one. 
That takes priority. We will never compromise safety. At the 
same time, in accordance with the guidance that Congress has 
given us, we are asked to encourage, facilitate and promote. So 
what does that mean? We do a number of different things. We try 
to collect and distribute information that we think is helpful 
to the industry, things like launch forecasts, economic impact 
assessments, various bits of information that we think could be 
a benefit to the companies that are actually working in the 
industry. We also put out documents or other reports that might 
be of interest to the industry. We hold pre-application 
consultations. We have workshops to help industry to understand 
our regulations and what we are expecting them to do when we 
license them. And then finally, we look at the environment in 
the interagency community working with NASA, working with the 
Congress, and to try to identify any particular obstacles to 
helping industry to be successful, and we think we can do all 
of those without compromising safety. So that is what we try to 
do.
    Mrs. Adams. Well, obviously, NASA has extensive experience 
in putting people and things up into space. It is what they 
have been doing for decades. So can you tell the Committee how 
AST plans to ensure that they are not stepping on NASA's 
mission and what you are doing to ensure there are no overlaps 
between NASA safety guidelines under the Space Act Agreements 
during the CCDev and CCiCap programs and your safety 
requirements for licensure?
    Dr. Nield. Yes. We work very closely with NASA. Some of the 
things we have done are to assign our employees. We have one in 
the Commercial Crew Program Office at the Kennedy Space Center. 
We have other people nearby at Patrick Air Force Base. We have 
two at the Johnson Space Center in Houston. We have regular 
telecons with our NASA counterparts, and as I mentioned, we are 
going through the NASA requirements right now to try to 
understand which things should directly apply and which things 
may not be applicable to the commercial activities.
    Mrs. Adams. Can you tell the Committee what AST is doing to 
work with the industry to ensure that everyone understands what 
you plan to do in the way of regulatory action?
    Dr. Nield. One of the prime things that we do is to work 
with our advisory committee, COMSTAC. We meet twice a year. We 
try to share our progress and invite their questions, comments 
or concerns so that we can address them in a quick and 
responsive way.
    Chairman Palazzo. Thank you. At this time we are going to 
move into a second round of questions. Mr. Costello.
    Mr. Costello. Mr. Chairman, thank you.
    Captain Trafton, let me ask you about the dual role that 
the AST has in both regulating and promoting the industry. As 
you know, for many years the FAA had the responsibility of 
promoting commercial aviation as well as regulating commercial 
airlines, and because of conflicts along the way, the Congress 
as a result of those conflicts decided to change the role of 
the FAA, and instead of promoting commercial aviation, which we 
felt that the airlines could do very well on their own, that we 
did not need--the Federal Government did not need to be 
promoting commercial aviation. For the airlines, we said that 
you should be a regulatory agency and changed their 
responsibility. Do you have a concern about the dual 
responsibility of the AST?
    Captain Trafton. Mr. Costello, at this time I don't. I 
don't see a conflict today in those two roles, and it is a 
fledgling industry, you heard. The industry I think can use the 
help from AST today. In fact, they sponsor in cooperation with 
AIAA an annual conference which was just held here in February, 
very well attended, great exchange of information. Both kinds 
of events are good for the industry. Now, down the road when 
the industry is more mature, absolutely, we should probably 
take a hard look at whether or not AST should be promoting 
commercial space.
    Mr. Costello. Thank you.
    Thank you, Mr. Chairman.
    Chairman Palazzo. Dr. Nield, more and more we hear about 
manmade orbital debris and the threat it poses to satellites, 
the International Space Station and to crewed capsules. Going 
forward, what can be done to prevent the creation of additional 
orbital debris? And I guess I will ask what measures, if any, 
are space-ferrying nations considering to eliminate the 
creation of orbital debris and to what degree has your office 
looked at this issue?
    Dr. Nield. We have certainly looked at it. However, as you 
know, we actually do not have on-orbit authority today. Our 
Congressional authority is restricted to launch and reentry. 
However, because the on-orbit phase is while you are doing the 
mission, it is important to understand what is going on. There 
have been a number of international discussions about proposed 
guidelines of what altitudes are appropriate for various 
satellites, if there are certain lifetimes that should be 
enforced, but we currently do not have requirements in place 
today for our commercial providers along those lines.
    Some of the things that you can do would be to carefully 
select the orbits that you are planning to fly to. Once the 
mission is complete, you could look at either reentering the 
satellite or boosting it up to a higher altitude so that you 
are not clogging up that orbital altitude with debris and used-
up satellites.
    Chairman Palazzo. What about upper stages that are 
discarded upon launch?
    Dr. Nield. That is a source of a significant amount of on-
orbit objects right now.
    Chairman Palazzo. Ms. Edwards, do you have a question?
    Ms. Edwards. Thank you, Mr. Chairman. I will be very brief.
    Dr. Nield, in your prepared statement, you note with regard 
to commercial human spaceflight that ``Based on market studies 
we expect to see this type of activity result in a billion-
dollar industry within the next 10 years.'' Can you tell me 
what the basis is of your estimate and what percentage of that 
estimate involves purely private, non-government customers?
    Dr. Nield. Yes. All of it involves non-government private 
customers. The basis for the figure is actually a study that 
was done by the Futron Corporation in recent years, and rather 
than just going down the street and asking who would like to 
fly in space, they did a careful assessment of potential 
customers who had the disposable income or the savings that 
would be able to afford these rather expensive tickets these 
days and how many of them would be interested in flying if such 
a vehicle were made available, and so that would form the basis 
for a lot of these projections, and I would point out that 
Virgin Galactic, which is one of the companies that is involved 
in this right now, already has almost 500 people who have put 
down either partial deposits or paid for a full ticket, and 
that has raised $60 million before the flights have even begun.
    Ms. Edwards. If part of the estimate is people who would 
like to come--we heard claims that the industry has been 
expected to begin operations within a few years, in the next 
several years, but some companies haven't even begun test 
flights yet, so I am curious as to how we can have confidence 
that the industry is going to grow to the level that you 
indicated, and on top of that, are we going to be--do we have 
to move to a point where we have a huge regulatory structure in 
place to handle an industry that we don't know really is going 
to mature in the kind of way that a new regulatory agency and 
body and oversight responsibilities would entail?
    Dr. Nield. That will be a very big challenge, and we 
certainly want to work with the Congress as we make progress 
year by year in the industry to see do we have the right amount 
of resources, do we have the right level of regulatory 
oversight. Frankly, it is very hard to predict how many of 
these companies are going to be successful. We are dealing with 
a dozen companies right now that are planning to develop 
vehicles to be part of this industry but we know that all of 
them will not be successful. Some are going to run out of 
money. Some are going to find technical challenges. But there 
are enough good people and enough private funds and government 
programs that are investing in these areas that we are pretty 
confident that we are seeing the beginning of a significant 
upswing.
    Ms. Edwards. Thank you very much. Thanks, Mr. Chairman.
    Chairman Palazzo. You are welcome.
    I thank the witnesses for their valuable testimony and the 
Members for their questions. The Members of the Subcommittee 
may have additional questions for the witnesses, and we will 
ask you to respond to those in writing. The record will remain 
open for two weeks for additional comments and statements from 
Members.
    The witnesses are excused and this hearing is adjourned.
    [Whereupon, at 11:05 a.m., the Subcommittee was adjourned.]
                               Appendix I

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                   Answers to Post-Hearing Questions




                   Answers to Post-Hearing Questions
Responses by Dr. George Nield, Associate Administrator for
Commercial Space Transportation, Federal Aviation Administration


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Responses by Capt. Wilbur C. Trafton (USN Ret.),
Chairman, Commercial Space Transportation Advisory Committee



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