Alaska Legislature Funding Kodiak Launch Complex is a Waste of Money

Dear Legislator:

      This message is written on behalf of the Kodiak Rocket Launch Information Group to explain why it is time to stop pouring money into the black hole that is the Kodiak Launch Complex.  KRLIG was formed in 1995 as an ad hoc group of Kodiak residents who were frustrated with Alaska Aerospace's lack of information and refusal to answer questions about the, at that time, proposed KLC.   As we corresponded with scientists, business people, and others around the country connected to the aerospace industry, our extensive research made it apparent that a rocket launching facility in Kodiak would NEVER pay for itself - a fact that has proven to be true.  It was at this point (1996 or 97) that more and more Kodiak residents opposed what came to be known locally as  "Space Pork Kodiak". A few years ago, an AAC official admitted to the Kodiak Island Borough Assembly that launch revenues had never covered the costs of keeping the facility open. 

     Some legislators have used the term "federally funded asset" in relation to the KLC; this phrase is somewhat misleading.  A more accurate term would be, "Ted Stevens funded asset".  When AAC went to AIDEA for a construction loan in the '90s, they were told not to come back until they could prove they would have the business to pay it back.  This never happened because they could not show they would have sufficient launches to pay back a loan and, more importantly, Senator Ted Stevens (at that time on the Senate Appropriations Committee) pushed through unwanted funding to USAF/DoD for initial construction - 40 million dollars, as I recall.  
      Here is a link to a story that explains what happened:  http://kodiaklaunchcomplex.blogspot.com/2008/12/klc-wasnt-wanted-by-military.html      This story appeared in  the Kodiak Daily Mirror in 2008. 
      Here is an article from the NY Times from about the same time documenting the USAF opposition to funding the KLC:  http://kodiaklaunchcomplex.blogspot.com/2008/10/incontrovertible-proof-that-klc-is.html

     Since 1998, AAC has been entirely dependent on state and federal funds just to keep the KLC open.  I am sure that you will hear from them this year that "several companies are interested in launches and contracts are imminent".  They have repeated that mantra for at least fifteen years with few results.  They will tout their "partnerships" as proof they are major players in the launch industry.  Well, without actual launch contracts they are not what they pretend to be.
       As long as Ted Stevens was in the Senate, the federal funds flowed; once he was out, it wasn't long until the Missile Defense Agency canceled the contract that essentially paid the costs of the KLC just to keep it open in case they wanted to launch a target missile.

    You may also hear claims along the "build it and they will come" line......another ploy AAC has used for years to continue to build more infrastructure requiring more money for maintenance, yet not really acquiring launch contracts. Keep in mind that every launch from the KLC has been paid for by federal government agencies - most have been military-funded launches.  Not one private entity has ever paid to launch a rocket in Kodiak.

    The last launch was September 26, 2011, and as of February 9, 2014,  there are no launches listed for 2014 on their website.  We don't know many businesses that can or should survive when, in almost three years,  they don't perform the service for which they were created.  Funding of the KLC is simply corporate welfare.

    The KLC was built on false premises, a non-existent (or fantasy) business plan, and now just sucks state funding for high salaries for its corporate officers (who do not reside in Kodiak) and maintenance for an ocean side facility that is quickly rusting away.  AAC will claim that they are bringing income and jobs to Kodiak.  This simply not true except when there is construction going on which provides short-term benefits although often the workers are from off-island or even out of state.

     Finally, it is my understanding that AAC has been paying a monthly stipend of $15,000 to the owner of the Narrow Cape Lodge which is used for lodging launch-related personnel;  it has been empty for the nearly three years since the last launch at the KLC.  We have learned that a legislator is trying to get state funds for AAC to purchase the "Space Hotel", which would mean even higher costs for them to maintain the KLC.  This purchase would be a waste of our dwindling state funds.

    Alaska Legislators, thank you for your attention to this issue.  It really is time to stop wasting money on this state boondoggle and close it down.   We have better and more productive uses for state money than the "Launch Pad to Nowhere". 

 We urge you to take action to stop this unrecoverable loss from our dwindling state coffers.  We look forward to your reply and thank you for your service to our state.

Launch or Lose Funding Ultimatum Given to Alaska Aerospace

Legislature pressures Alaska Aerospace to launch

by James Brooks/ editor@kodiakdailymirror.com

Apr 22, 2013

On Sunday afternoon, a rocket soared to orbit from a launch pad on Virginia, a successful launch that may mean good news for the Kodiak Launch Complex 4,000 miles away.

This spring, the Alaska Legislature voted to cut 1 percent (about $80,000) from the Alaska Aerospace Corporation’s FY2014 funding. Hidden within the funding for Alaska Aerospace — which operates the Kodiak Launch Complex — is a catch.

If Alaska Aerospace does not sign a long-term commercial launch contract by March 31, 2014, the legislature will cut its budget by one-quarter.

That’s below the amount AAC leaders have said is necessary to maintain the Kodiak Launch Complex and keep AAC running as a viable corporation, but AAC CEO Craig Campbell said he’s confident his company can meet the challenge.

“I concurred with the challenge that we need to produce a customer in the next fiscal year,” he said. “They actually gave us a little breathing room.”

Alaska Aerospace Corporation was founded by the state in 1991 as a means to develop the aerospace sector of Alaska’s economy. It built the Kodiak Launch Complex to compete with California’s Vandenberg Spaceport, which launches satellites into polar orbits.

While the first years of AAC’s operation were funded through revenue from launches and grants from the federal government, since 2011 AAC has become reliant upon regular state subsidies.

In 2011, the Legislature approved $4 million for AAC. In 2012, it signed off on $8 million in direct subsidies. That year, Governor Sean Parnell also approved $25 million to expand Kodiak Launch Complex.

Legislators approved another $8 million this year for AAC, but cut the corporation’s funding request by 1 percent, paralleling similar cuts to other state departments.

Rep. Alan Austerman, who represents Kodiak in the state House and sits on the AAC board of directors, said legislators’ patience is running out. “We can’t just let it continue to go on and on and on,” he said.

Campbell said AAC can bear this year’s cut, but he now faces a tight deadline to generate revenue and wean the public corporation off state funding.

Sunday’s launch in Virginia shows one possible way forward. The launch came from Wallops Flight Facility, a state-owned spaceport run by Dale Nash, who headed Alaska Aerospace before Campbell.

The rocket, named Antares, was designed and built by Orbital Sciences, which has not yet picked a West Coast launch site for the Antares. Kodiak is in the running, as is Vandenberg.

Launching the Antares from Kodiak would require a major expansion of the spaceport here, something already planned under an agreement with Lockheed-Martin.

Lockheed, however, has been slow to sell space aboard the rockets it plans to launch from Kodiak, and planning for the Launchpad expansion has stalled. Unless Lockheed can confirm a launch date, Campbell has said he will not put state money at risk by expanding the Kodiak Launch Complex.

Orbital Sciences offers a second route. Because the Antares launch Sunday was successful, that rocket may be more attractive than Lockheed’s to satellite owners who want to reach orbit.

The ball is in Orbital Sciences’ court, but Alaska Aerospace isn’t sitting still.

As it waits for an answer from Orbital and Lockheed, the state-owned corporation is negotiating contracts for smaller rockets that can be launched from Kodiak’s existing launchpads.

“I think I’m going to have one in the near term, this year,” Campbell said.

Campbell’s optimism is matched by Sen. Gary Stevens, who formerly sat on AAC’s board of directors and represents Kodiak in the Alaska Senate. “I think you'll find that in the next two years they'll have some successful projects and some successful launches,” he said. “I think it’ll show that they’re in the market and they can successfully compete.”

Until a company signs on the dotted line, however, AAC will continue to move closer to March 31, a date that might be its final countdown.

As of April 22, it has been 573 days since the last launch at the KLC.

Contact Mirror editor James Brooks at editor@kodiakdailymirror.com.

Read more: Kodiak Daily Mirror - Legislature pressures Alaska Aerospace to launch

Kodiak Launch Complex expansion faces delay

JAMES BROOKS, Kodiak Daily Mirror

KODIAK (AP) — Alaska Aerospace Corporation's plans for a new launch pad have been delayed, not canceled.
In a four-hour board meeting Thursday at the Kodiak Launch Complex, CEO Craig Campbell confirmed that Lockheed-Martin's delays in finding customers for a new, larger Kodiak-launched rocket means at least a one-year delay in construction of Launch Pad 3.
"Now we're projecting into the 2015 period for the launch of the Athena III," Campbell said.
That timeline means construction will not begin until next summer at the earliest.
Work isn't standing still on the project that has been hailed as the future of the Narrow Cape complex. Campbell told board members he's keeping the ball moving on the environmental assessment that must take place before the launch pad can be built. "We expect that to roll forward in the next couple months, then go out to a public comment period," he said.
During the last session of the Alaska Legislature, Gov. Sean Parnell pledged $25 million in state support for the $125 million estimated cost of the launch pad. Financial "gates" are built in to that amount, ensuring Alaska Aerospace cannot move forward with construction and design until a contract is in hand and private financing in place.
Campbell said he has added restrictions of his own and will spend no more than $1 million until Lockheed commits to a launch date and signs a contract.
That amount takes the project to about 65 percent of design, but not engineering work, Campbell said.
The corporation stopped deliberately short of detailed engineering in an attempt to accommodate Orbital Sciences, another space company that has expressed an interest in launching from Kodiak.
Orbital's Antares rocket is designed differently than Lockheed's Athena III, and the new launch pad would need extra equipment to serve both rockets. Orbital is considering both Kodiak and Vandenberg Air Force Base in California as its West Coast launch site for the Antares, but it is not expected to decide between the two until early next year, after it launches its first Antares from a spaceport in Virginia.
"I don't want to get into an engineering and design concept for a solid-based rocket only to find out Orbital is coming here with a liquid-based rocket," Campbell said.
While the delay may pay off for Kodiak if another customer is willing to spend millions for permission to launch rockets from Alaska, the slow pace of development could continue if Congress drags its feet on the federal budget.
The vast majority of America's space projects are at least partially funded by the federal government, and Congress' inability to pass a new defense budget means multibillion-dollar contractors like Lockheed and Orbital don't know how much they can sell. That, in turn, means those companies don't know how many rockets they need to launch from places like Kodiak.
In addition, said Alaska Aerospace chief operating officer Mark Greby, companies like Orbital and Lockheed are awaiting the results of November's presidential election. President Barack Obama and Republican hopeful Mitt Romney have similar space policies, but a few percent difference in funding represents hundreds of millions, if not billions of dollars, Greby said. "In all honesty, they're all stalling to see which way the climate is going."
Until that weather forecast changes, Launch Pad 3 looks to be stuck in the cold.
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Information from: Kodiak (Alaska) Daily Mirror, http://www.kodiakdailymirror.com

This article appears in the October Issue 1 2012 issue of Alaska Journal of Commerce

Read more: http://www.alaskajournal.com/Alaska-Journal-of-Commerce/October-Issue-1-2012/Kodiak-Launch-Complex-expansion-faces-delay/#ixzz2C8OCyBkr