FAA Limits Evaluation of Spaceport Infrastructure Funding Options

U.S. commercial launch sites that are licensed to host or have hosted since 2015, a commercial space launch, as of August 2020 (Credit: GAO)

by Douglas Messier
Managing Editor

The Federal Aviation Administration (FAA) has rejected a recommendation from a government watchdog that it conduct detailed analysis of a broad range of financing tools for funding infrastructure projects at the nation’s spaceports.

In a report to Congressional committees, the Government Accountability Office (GAO) said it recommended to the FAA that it analyze the trade-offs of using direct loans, loan guarantees, tax incentives and other tools to increase investment in spaceport infrastructure.

The analysis would be part of a report on spaceport infrastructure funding that legislators ordered the FAA to provide Congress under the FAA Reauthorization Act of 2018. The draft report was under internal FAA review as of November.

The FAA said it is considering including the options in the final report to Congress. However, the agency told GAO that it doesn’t have the time or resources to conduct an in-depth analysis of them.

Instead, the FAA’s draft report focused on using the existing Airport Improvement Program (AIP) and reviving the Space Transportation Infrastructure Matching (STIM) program, which provided grants to spaceports during the 2010-12 fiscal years.

“FAA officials said that a factor influencing their identification of these two programs…was that the two could be implemented quickly because (1) the STIM program was previously used to support spaceport infrastructure and (2) FAA still has administrative authority to manage both programs under the current statutory scheme,” the GAO report said.

“When identifying these two programs, FAA did not comprehensively assess their effectiveness to support spaceport infrastructure,” the report added. “For example, while FAA obtained some industry input from licensed spaceports, officials acknowledged that they did not, as part of this effort, solicit information from launch providers on their requirements for spaceport infrastructure.”

U.S. commercial launch sites with number of FAA-licensed launches, January 2015 – November 2020, (Credit; GAO)

Airports that hold spaceport launch site operator licenses are able to tap AIP funding for infrastructure upgrades. The Mojave Air and Spaceport has received nearly $16 million in AIP grants for runway and taxiway projects since 2010, according to the GAO report.

Mojave is primarily an airport that is also used for space operations. For example, Virgin Galactic and Virgin Orbit have used the runways during the testing of the air-launched SpaceShipTwo suborbital space plane and LauncherOne booster, respectively.

Under law, AIP matching grants are limited to aviation infrastructure projects. Expanding the program to fund projects that specifically support space operations would require action by Congress, the GAO report said. The move would prove controversial, however.

“With regard to AIP, the program already has more planned investments for airport infrastructure projects than it has available funding. Many aviation stakeholders have publicly described the use of AIP for space operations as diverting funds from its intended use—aviation-related activities,” the GAO report said.

While AIP grants can run into the millions of dollars, the STIM grants awarded during FY 2010-12 topped out at $250,000. GAO found the small amount and STIM’s rules created challenges for grant seekers.

“For example, two spaceport operators told us that the small STIM grant amounts, in combination with a large—relative to AIP—required matching amount from private and local government sources, made it difficult to fund infrastructure projects, which can be expensive,” the GAO report said.

“One of these spaceport operators noted that the administrative burden of the application was large compared to the amount of money that was available, while one spaceport representative thought that AST did not have sufficient resources at the time to administer this type of program,” the report added.

The STIM program is also limited by law to providing infrastructure funding to public agencies only.

“Under this criterion, the 12 spaceports—launch sites with FAA site operator licenses—would be eligible for the grants. Private companies operating exclusive-use sites or launch complexes on or co-located with federal ranges—where the majority of current activity is—would not be eligible,” the report said.

The GAO report noted that private space operators have have been making major investments in launch infrastructure. They are receiving financial support from state and local governments.

The FAA responded that the GAO had overstated the impact of these efforts.

“The FAA disagrees that the reason for launch providers meeting their customers’ requirements is largely a result of launch providers’ investments in launch sites. This minimizes the significant amount of federal investment in launch sites over the years at Federal ranges. The majority of commercial launches are from federal launch ranges developed over the decades with primarily federal funding,” the FAA said.

A summary of the GAO report’s findings is below.

Commercial Space Transportation: FAA Should Examine a Range of Options to Support U.S. Launch Infrastructure

Government Accountability Office
December 2020
GAO-21-154
Report

Highlights

Why GAO Did This Study

Demand for commercial space launches is anticipated to increase in the coming years. FAA, the agency responsible for overseeing the sites where these launches occur, was directed by statute to submit a report—and update it every 2 years until December 2024—that makes recommendations on how to facilitate and promote greater investments in space transportation infrastructure.

The FAA Reauthorization Act of 2018 included a provision for GAO to review issues related to space transportation infrastructure. This report discusses launch providers’ and site operators’ views on the sufficiency of infrastructure in meeting market demand and assesses the steps FAA has taken to identify options for federal support of space transportation infrastructure, among other things. GAO reviewed relevant regulations; assessed FAA’s actions against GAO identified leading practices; and interviewed FAA officials, commercial launch providers, and representatives from U.S. commercial launch sites that GAO identified as having hosted an FAA-licensed launch since 2015 or having an FAA launch site operator license as of August 2020.

What GAO Found

Launch providers support the deployment of people and payloads, such as national security and commercial satellites or research probes, into space. The majority of these providers told GAO that U.S. space transportation infrastructure—located at sites across the country—is generally sufficient for them to meet their customers’ current requirements. This situation is in part a result of the launch providers’ investments in launch sites, along with state and local funding. Launch providers and site operators alike seek future improvements but differ on the type and location of infrastructure required. Some launch providers said that infrastructure improvements would be required to increase launch capacity at existing busy launch sites, while a few site operators said that new infrastructure and additional launch sites would help expand the nation’s overall launch capacity.

U.S. commercial launch sites with number of FAA-licensed launches, January 2015 – November 2020, (Credit; GAO)

The Federal Aviation Administration (FAA) was directed by statute to make recommendations to Congress on how to facilitate and promote greater investments in space transportation infrastructure, among other things. However, FAA’s initial draft report was limited because it focused only on two existing FAA programs, rather than a range of options. FAA officials stated that they did not examine other options because of limited time and resources, and that the two identified programs could be implemented quickly because FAA has administrative authority to manage them. Leading practices in infrastructure investment emphasize the importance of conducting an examination of potential approaches, which can help identify how best to support national interests; avoid overlap or duplication of federal effort; and enhance, not substitute, participation by non-federal stakeholders. An examination may also help identify alternatives to making funding available, such as increasing efficiency and capacity through technology improvements. By focusing only on these existing programs, FAA may overlook other options that better meet federal policy goals and maximize the effect of any federal investment. Although FAA has already prepared its initial report to respond to the statute, it still has opportunities, such as during subsequent mandated updates, to report separately on potential approaches.

What GAO Recommends

GAO recommends that FAA examine a range of potential options to support space transportation infrastructure and that this examination include a discussion of trade-offs. DOT partially concurred, noting that it would provide its mandated report to Congress but not conduct a new examination of a range of options. GAO continues to believe that such an examination is warranted.