02 May 2014

Injunction on RD-180 Engine Sales May Have Broader Implications

Author: Marco A. Cáceres, Drawn From: World Space Systems Briefing

US Court of Federal Claims Judge Susan Braden's injunction on Wednesday prohibiting United Launch Alliance (ULA) of Denver, Colorado, from procuring more RD-180 liquid-fuel engines from NPO Energomash (through the US-Russian joint venture RD AMROSS) could have much broader implications for the United States than first meets the eye. Besides possibly delaying or even prohibiting buys of this critical engine for ULA's Lockheed Martin-built Atlas V, which currently launches the bulk of US military satellites, the decision has the potential to complicate NASA payments for flights for its astronauts to the International Space Station (ISS) aboard Russian Soyuz rockets and capsules.

The injunction halts any RD-180 engines sales until the US departments of Commerce, State, and Treasury confirm that the sales do not violate sanctions signed on March 16 by President Obama against several top Russian government leaders, including Deputy Prime Minister Dmitry Rogozin, who is the head of Russia's defense and space industries. My assumption is that the injunction is temporary, because the US government will quickly respond that the sanctions against Mr. Rogozin apply to any personal business dealings with the man and not in his professional capacity as a representative of the Russian government. The distinction may be tricky, but the Obama administration would certainly word things in a way to ensure that business transactions between ULA and Energomash go uninterrupted... for the sake of US national security.

Assuming the Russians themselves don't decide to stop selling the RD-180s to ULA, Judge Braden's concerns should soon be alleviated and the sale of these engines should continue as normal. But what if there is a glitch, and either Commerce, State, or Treasury drag their feet or determine that the RD-180 sales do, in fact, violate the March sanctions? Or what if all three departments agree that there is no violation, but Judge Braden remains unconvinced by the explanations provided?

Well, then ULA suddenly finds itself with a big problem. It will have to make do with the supply of RD-180s is has, and it will eventually have to find a replacement for them within the next couple of years. The Department of Defense (DoD) will still be able to launch its satellites on Atlas Vs for a while, and it will still have the options of launching on Boeing Delta IVs and SpaceX Falcon 9s. Assuming Congress is willing to give DoD somewhere between a few hundred million and a billion dollars to develop an American replacement for the RD-180, the impact of any prohibition against US buys of the Russian engine could be finessed and minimized.

If it is determined that the March sanctions do apply to Mr. Rogozin as a representative of the Russian government, and thus Judge Braden's injunction holds and eventually turns into a prohibition, the real dilemma will be for NASA, because then the same logic used against further US buys of the RD-180 could also be used for US payments for rides of its astronauts aboard Soyuz.

Because NASA does not have its own human-rated launch vehicle, it pays Russia's space agency, Rosaviakosmos, just over $71 million per ride on Soyuz to the ISS. In short, the US is completely dependent on Russia to transport astronauts to and from an orbiting facility built with more than $100 billion in US tax dollars. Not a pretty sight, particularly these days with Mr. Putin causing such a ruckus in the Crimea and now eastern Ukraine.

If the US government is blocked (by its own sanctions against Russian leaders) from doing business with Rosaviakosmos because Mr. Rogozin oversees that agency at a broad level, then NASA has no immediate options for sending its people to the ISS. Russia could always offer to give US astronauts free rides out of the goodness of its heart. Eh, but don't count on it. Mr. Rogozin apparently recently tweeted : "After analyzing the sanctions against our space industry, I suggest the US delivers its astronauts to the ISS with a trampoline."

About the Author

Marco A. Cáceres

Marco A. Cáceres

Marco joined Teal Group in March 1990. Previously, he was a market analyst for Jane's Information Group of the UK. As editor of both the Jane's DMS Defense & Aerospace Agencies and DMS Electronic Systems publications, Marco analyzed and wrote about the R&D and procurement activities within the defense- and aerospace-related agencies of the federal government, with a focus on the markets for major electronic warfare (EW) subsystems. Additionally, Marco edited Jane's DMS Budget Intelligence newsletter -- a weekly covering defense budget news.

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