Wrapping up a commercial space bill
by Jeff Foust
|The purpose of what’s become known as the learning period was to allow the industry to develop flight experience and best practices upon which regulations could be based.|
While the final bill includes a number of topics, its purpose is arguably twofold. In the near term, it addresses some key issues in commercial human spaceflight, extending regulatory protections for companies that plan to launch humans either on suborbital or orbital flights in the years to come. The bill, though, also addresses a longer-term, and potentially more controversial, issue of rights for companies that plan to extract resources from asteroids, the Moon, or other bodies in the solar system.
One section of the bill is an update to existing commercial space transportation law, in particular to sections added in the Commercial Space Launch Amendments Act of 2004 dealing with human spaceflight issues, including restrictions on the government’s ability to regulate the safety of those flying on commercial spacecraft.
One of the biggest changes in the bill is an extension of what the industry, and now even the FAA, have come to call the “learning period.” That is a provision of federal law the prevents the FAA’s Office of Commercial Space Transportation from enacting safety regulations for people flying on commercial spacecraft—spaceflight participants—except in the case of a serious or fatal accident or similar incident.
The purpose of what’s become known as the learning period was to allow the industry to develop flight experience and best practices upon which regulations could be based. When the 2004 bill was enacted, that learning period was set to expire in December 2012. In early 2012, an overall FAA authorization bill extended it to October 1, 2015. A bill passed in September provided another six-month extension of the learning period.
By the time of the September bill, both the House and Senate has passed bills with much longer extensions of the learning period: through September 2020 in the Senate bill and the end of 2025 in the House bill. The reconciled bill extends the learning period through September 2023.
FAA officials have argued against an extension of the learning period, arguing that it prevented them from having the flexibility to develop regulations, even while dispelling any concerns in industry that it was immediately planning to promulgate regulations once the learning period expired. By last month, though, the FAA seemed resigned that a multi-year extension was inevitable.
“We’ve encouraged the industry to develop consensus standards,” said George Nield, FAA associate administrator for commercial space transportation, at a meeting of the FAA’s Commercial Space Transportation Advisory Committee (COMSTAC) October 21. “But, frankly, there is currently no incentive for industry to work on them.” He suggested government and industry start working together on a potential regulatory framework.
The final version of the commercial space bill does provide some incentive for industry to work on consensus standards. The bill includes several requirements for reports from the Secretary of Transportation on the status of industry consensus standards, as well as an independent review due by the end of 2022—nine months before the learning period is set to expire—on those standards and the readiness of the industry to transition to a more conventional regulatory framework.
|The bill also outlines policy for use of the SLS, including both human exploration missions beyond Earth orbit as well as “other payloads and missions that substantially benefit from the unique capabilities” of the heavy-lift rocket.|
A less controversial extension included in the bill covers government indemnification of third-party damages from commercial launches. Under a system that has been in place since the late 1980s, launch providers are responsible to any third-party damages up to a “maximum probable loss” level calculated as part of their license application. Any damages that might exceed that level would then be covered by the federal government up to nearly $3 billion.
That indemnification, while never needed by a commercial launch to date, is still considered important by the commercial space industry, particularly given the similar or greater protections offered to commercial launch providers in other countries. That indemnification section was set to expire at the end of 2016, but the new bill renews it through September 2025.
The bill, though, also requires the Secretary of Transportation to evaluate how it calculates maximum probable loss to ensure the government “is not exposed to greater costs than intended and that launch companies are not required to purchase more insurance coverage than necessary.” That assessment would then be reviewed by the Government Accountability Office.
While the primary debate about the extensions of the learning period and launch indemnification were primarily over their length, there was more debate about provisions from the House bill that made it into the final one. The bill includes spaceflight participants in the cross-waivers of liability that launch providers and their customers currently agree to, and also include spaceflight participants in indemnification of liability from any third-party damages caused by launch accidents.
Those provisions raised opposition earlier this year from some Democratic House members, who thought that this meant spaceflight participants could not sue launch providers in the event of an accident. “This really is quite an indefensible provision,” said Rep. Donna Edwards (D-MD) during discussion then regarding the federal jurisdiction clause of the House bill, arguing that the bill is “basically providing the launch industry with complete immunity from any civil action.”
Industry supported both provisions, saying that they were needed to enforce the “informed consent” regime that governs commercial spaceflight, as well as protect spaceflight participants from suits for damages in the event of accidents. “I think we’re on the right path,” said Steve Avila, senior corporate counsel of The Spaceship Company, at a space law conference held by the University of Nebraska College of Law October 29. He specifically referred to the cross-waiver language in the bill. “This is a good direction.”
Those provisions reportedly triggered a hold in the Senate on the final version of the bill after House and Senate conferees completed their work on it October 28. No senators publicly acknowledged that they opposed the bill, but industry sources said one or more members of the Senate Judiciary Committee opposed the bill.
It’s unclear what, if anything, happened to lift the hold, although the final version of the bill includes spaceflight participations in both the indemnification and cross-waiver sections only through September 2025.
The bill includes several other provisions related to commercial spaceflight. One creates a new class of individuals flying such vehicles, called government astronauts, who are treated somewhat differently than commercial spaceflight participants. Another section allows companies to retain an experimental permit for flight tests even after they receive a commercial launch license.
And the bill includes language directed more at NASA than the commercial space industry. It adopts language from the Senate bill that extends the authorization of International Space Station operations through 2024. It also outlines policy for use of the Space Launch System, including both human exploration missions beyond Earth orbit as well as “other payloads and missions that substantially benefit from the unique capabilities” of the heavy-lift rocket.
For several companies, their interest in the bill was less on the commercial human spaceflight provisions than those related to space resources. The House version of the bill passed in May, but not the Senate version, included language granting ownership rights to companies that extracted resources from asteroids, without granting rights to the asteroids themselves.
|“I can’t describe how huge this is,” Lewicki said. “In most areas where I give a talk, the first question that I get from people in the audience is, ‘Can you own what you mine from an asteroid?’ Now I can say yes.”|
The final version of the bill offered a broader, yet more restricted, version of the rights sought in the original House bill. The final bill now includes all “space resources,” not just those from asteroids; the bill defines “space resource” as “an abiotic resource in situ in outer space” that explicitly includes water and minerals. The bill, though, does not include the litigation provisions for resolving disputes between US companies involving “harmful interference” accessing asteroid resources.
The limited scope of the bill, though, is still satisfactory to companies that have plans to mine asteroids or other solar system bodies. It “creates a whole new level of certainty not only for us, but for the entire commercial space industry,” said Peter Marquez, vice president for global engagement for Planetary Resources Inc., at the Nebraska Law conference.
Marquez said his company, among others, believed there is an “inferred right” to resources taken from asteroids, but that right had not been made explicit in law prior to the current bill. That created uncertainty among potential investors about the company’s ability to own, and ultimately profit from, those resources. “This will give us a tremendous level of certainty that will unlock a vast amount of investment resources and also give us certainty about what we can do in the future,” he said.
Marquez’s boss also endorsed the bill. “This week has been awesome,” said Chris Lewicki, president and chief engineer of Planetary Resources, said in a talk November 13 at SpaceVision 2015, the annual conference of Students for the Exploration and Development of Space, in Boston. That was, at least in part, due to the Senate’s passage of HR 2262 with its space resource rights provisions.
“I can’t describe how huge this is,” he said. “In most areas where I give a talk, the first question that I get from people in the audience is, ‘Can you own what you mine from an asteroid?’ Now I can say yes.”
|“That’s clearly not what Congress intended,” Dunstan said. “But that won’t stop creative lawyers from trying to lock down key resources and charging royalties for them—well before they’ve actually mined anything.”|
The chairman of Deep Space Industries, another company with asteroid mining plans, also supported the bill’s passage. “It basically recognizes our right to utilize and own the resources once we’ve harvested them,” Rick Tumlinson said at SpaceVision 2015 November 14. However, he emphasized, “We have not been granted property rights in space.”
The change in the bill language from “asteroid resources” to the more inclusive “space resources” has the support of Moon Express, a company competing in the Google Lunar X PRIZE with long-term plans for space resource utilization.
“The opportunities for the private sector to explore and utilize space resources are substantial,” Moon Express founder and CEO Bob Richard wrote in a November 16 letter to the chairman and ranking member of the House Science Committee. The bill, he said, “recognizes and promotes the rights of United States companies to engage in the exploration and extraction of space resources from the Moon and other celestial bodies.”
Not everyone is pleased with the bill. Tech Freedom, a Washington think tank, noted that while the final bill language was an improvement over earlier versions, it still had problems.
“The essential problem is the word ‘obtained,’” said Jim Dunstan in an November 11 statement from Tech Freedom about the bill. The term, he said, is not defined in the bill, making it unclear what it means and, he warned, creating a loophole that companies might exploit.
“This ambiguity leaves the door open for mining companies to claim a new kind of intellectual property in data about space resources they have merely surveyed from afar. That’s essentially a mining claim—but without any of the use-it-or-lose-it constraints and time limits of traditional mining law,” he said in the statement. “That’s clearly not what Congress intended. [Emphasis in original] But that won’t stop creative lawyers from trying to lock down key resources and charging royalties for them—well before they’ve actually mined anything.”