WASHINGTON ? The July 26 test stand accident that killed three Scaled Composites employees on a propulsion system for Virgin Galactic?s SpaceShipTwo is expected to be no more than a temporary setback for the emerging personal space flight industry.

The Federal Aviation Administration (FAA) office in charge of licensing private space flight operators, including New Mexico-based Virgin Galactic, is treating the test stand mishap as an industrial accident, leaving the ongoing investigation to Scaled Composites and California?s workplace safety authorities. Patricia Grace Smith, the FAA?s associate administrator for commercial space transportation told Space News July 31 in a statement that the director of the Mojave Air and Spaceport where the incident occurred and the California [Occupational Safety and Health Administration] officials called in to investigate ?indicate this was an industrial accident, a fuel-flow test gone terribly wrong.? The incident did not involve any activities regulated by the FAA, according to Smith.

?It was not a launch accident. It was not a flight accident. It was not directly related to vehicle performance or passenger involvement,? she said.

The FAA is expected to closely follow the accident investigations being conducted by California OSHA and Scaled Composites. Sources familiar with the FAA?s processes said the regulatory agency likely would factor the investigation findings into future license or permit applications relating to SpaceShipTwo, which is being built to carry six paying passengers into suborbital space.

?The FAA does take accidents during development into consideration when it conducts its maximum probable loss analysis,? said a lawyer who follows commercial space transportation law. ?So this will come back to some degree to Scaled Composites when they decide to go out and actually get a license.? For now, Smith?s message was one of support, both for the Scaled Composites and the pursuit of personal spaceflight.

?First and foremost the Mojave accident was a crushing day for the families of those lost and injured. It was a painful and unforgettable day for Scaled Composites,? Smith said in her statement before concluding, ?The dream of private human spaceflight is in motion and I expect it to keep moving forward.?

Scaled Composites officials, in keeping with their general secrecy about most matters involving SpaceshipTwo, have provided little detail about what hardware was on the test stand when the accident involving a cold-flow test went wrong, killing Todd Ivens, 33, Eric Blackwell, 38, and Glen May, 45 and seriously injuring three of their co-workers.

During a July 27 press conference at Mojave airport, Scaled Composites Chief Executive Burt Rutan told reporters, ?We were doing a test we believe was safe. We don?t know why it exploded. We just don?t know.?

Several industry sources said the test activity taking place July 26 involved a composite tank designed for SpaceShipTwo. Like the reusable SpaceShipOne, which flew twice in two weeks to win the $10 million Ansari X Prize in 2004, SpaceShipTwo is being designed to rely on a hybrid rocket engine that uses nitrous oxide as an oxidizer and a rubber-based fuel.

Doug Shane, Scaled Composites vice president for business development and director of flight operations, would not say whether the nitrous oxide tank destroyed in the accident was flight hardware.

?The case remains under investigation and we are following the lead of state investigators,? he wrote Aug. 1 in an e-mail. ?Our focus this week has been on the families and friends as we continue to mourn this tragic event. We hope to learn all of the answers that can avert the potential of something like this happening in the future.?

An industry official who asked not to be identified since the investigation was still under way predicted that the accident likely would ?slow Virgin Galactic down a bit? but that they would ?remain undeterred from entering commercial service.?

Prior to the accident, Virgin Galactic said it expected SpaceShipTwo to begin service no sooner than late 2009.

George Whitesides, Virgin Galactic?s senior advisor in Washington, declined to comment on the accident?s impact on the company?s business plans.

The accident so far has elicited no public comment from Congress, which passed legislation in 2004 setting the framework for regulating personal spaceflight. But congressional staffers are asking questions.

Stu Witt, the director of the Mojave Air and Spaceport, was in Washington the week of July 30 on what he said was a long-planned quarterly visit to meet with officials at the FAA and Congress. He told Space News the accident was discussed during his meetings, but would not go into detail.

?The fact that we had a mishap last week added a little more substance at times to the visit,? Witt said Aug. 2 in a brief interview.

Washington sources said Smith, too, was on Capitol Hill the week of July 30, stopping by the House Transportation and Infrastructure Committee for a meeting requested by staff there to discuss the accident.

Smith?s office would not comment on the meeting.

Jim Muncy, a former congressional staffer and Alexandria, Va.-based consultant who works on personal space flight policy issues, said congressional attention should be expected but that he does not foresee Scaled Composites? accident creating political fallout for the industry.

?Everyone wants this industry to succeed. Everyone knows this is our first trial,? Muncy said. ?Members of Congress and their staffs are going to ask questions to make sure that we learn from it. But the law and the regulatory regime are in place to ensure public safety and to enable the industry to learn and grow and succeed.?

A week after the accident, two of the three Scaled Composites employees seriously injured in the blast ? Keith Fritsinger and Gene Gisin ? remained in critical condition but were making progress in their recovery, according to an update posted on Scaled Composites? Web site. Jason Kramb, meanwhile, was upgraded from serious condition and moved to a burn unit in Southern California to continue his recovery.

Scaled Composites also announced the formation of a support fund to aid the victims and families of those affected by the accident.

?This is an incredibly hard time for all of us,? Scaled officials said in a statement. ?We continue to ask you to keep those people and families who were hurt or have died in your thoughts and prayers.? The fund can be reached through Scaled Composites? Web site or by contacting the Scaled Family Support Fund c/o Scaled Composites, 1624 Flight Line, Mojave, Calif. 93501.

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