"The most insurmountable risk is the desire of the U.S. government and NASA to subsidize competing launch systems," Beal said in the statement. "NASA has embarked on a plan to develop a ‘second-generation’ launch system that will be subsidized by U.S. taxpayers and that will directly compete with the private sector."
While the SLI is designed primarily to develop human-rated reusable launch systems that would eventually replace the shuttle, Beal said such systems could also support markets in direct competition with his and other private companies. "We find it inexcusable and intolerable that NASA intends for these subsidized systems to additionally compete for non-human-rated missions, including cargo for the space station and commercial satellite missions."
"Where would the computer industry be today," he asked, "if the U.S. government had selected and subsidized one or two personal computer systems when Microsoft or Compaq were in their infancy?"
Beal said Congress’s decision last week to fund SLI left his company with only two options: to evolve into a government contractor and seek government contracts, or shut down. "We have elected to cease operations," he concluded.
While the concern over government-funded competition was Beal’s primary concern, he did cite other risks that led to his decision to shut down the company. Included among them was the potential liability for preexisting environmental contamination at the Cape Canaveral launch pads the company was considering for its initial test launches. Beal was also concerned that the State Department might not approve the company’s plan to build a permanent spaceport in the northeastern South American nation of Guyana.
Andrew Beal founded Beal Aerospace in 1997 when he saw an opportunity to enter what promised to be a rapidly growing satellite launch market. Unlike a number of reusable launch vehicle (RLV) companies that started up around the same time, Beal focused on developing a powerful but simpler, and hence less expensive, expendable rocket that would go after the lucrative geosynchronous communications satellite market. Beal also set itself apart from other entrepreneurial launch companies through its funding. Rather than seek venture capital, as RLV companies did with limited success, Andrew Beal funded the company using the profits from Beal Bank, of which he owns 99 percent.
Beal Aerospace has also encountered its share of controversy. The company originally planned to develop a launch site on Sombrero Island, a small, uninhabited island in the Caribbean near Anguilla. Those plans were put on indefinite hold by the company after environmentalists helped delay a report assessing the impact the launch facility would have on the desolate island. Plans to build a rocket manufacturing facility in the Virgin Islands were similarly blocked.
Beal’s agreement earlier this year with the government of Guyana to build a spaceport there has not been without controversy either, since the launch site would be located in a region of the country that neighboring Venezuela claims as its own. The Venezuelan government has raised concerns about the spaceport, claiming at times that the facility may be a cover for a U.S. military base.
Beal said he was skeptical that other companies developing private launch vehicles can be successful. "Unfortunately, development of a reliable low-cost system is simply not enough to insure commercial viability," he noted. "There will never be a private launch industry as long as NASA and the U.S. government choose and subsidize launch systems."
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