Billionaire Michael Bloomberg Wants to Crush Boeing’s Space Dream

Is Boeing‘s (BA 4.10%) biggest project in space just one gigantic boondoggle? That’s the question billionaire Michael Bloomberg, founder of the Bloomberg financial news service, asked (and answered) in an opinion piece published on Bloomberg last month.

And his answer was yes.

Boeing’s biggest project in space

I refer of course to Project Artemis, NASA’s ambitious plan to put astronauts back on the moon for the first time since 1972. Central to Project Artemis is the gigantic Space Launch System rocket (SLS), which NASA intends to use to carry astronauts to the moon and back.

Boeing is the prime contractor on SLS, although space companies such as Northrop Grumman, L3Harris, and Lockheed Martin all play supporting roles. And with an estimated future cost exceeding $82 billion, SLS is inarguably Boeing’s biggest project in space.

But according to Bloomberg, SLS isn’t just very big. It’s too big. It costs too much, and it should be canceled.

The problem with SLS

NASA has invested just under $24 billion on developing the Space Launch System already, argues Bloomberg, “without anyone getting off the ground.” SLS has launched just once so far, on the Nov. 16, 2022, Artemis I mission, which was remotely controlled. And costs are “spiraling upward.”

Every time an Artemis SLS launches, it costs NASA another $4 billion. Bloomberg points out that this is “quadruple initial estimates.” Across 20 planned launches, SLS could generate $82 billion or more in revenue for Boeing — equal to more than three full years of revenue for Boeing’s entire defense, space, and security division, according to data from S&P Global Market Intelligence.

The problem is, SLS’ immense price tag arguably doesn’t even buy the capability for which the rocket was designed.

Lacking the power to reach the moon on its own, SLS requires a $5 billion Lunar Gateway space station to be built in lunar orbit, where it can dock and transfer crew to a lunar lander for descent to the moon. And to get said Lunar Gateway to lunar orbit in the first place will require expensive upgrades to the existing SLS.

This “Block 1B” version of the rocket, says Bloomberg, will be even more expensive than the original recipe SLS, costing $5.7 billion. It will also require a special “ML-2” tower to be built to launch it, adding $2.7 billion (“more than seven times initial estimates,” by the way) to the cost.

Add all these billions up, and Project Artemis as currently planned could end up costing America “nearly $100 billion” — almost as much as Bloomberg himself is worth!

A multibillionaire’s solution to a multibillion-dollar problem

Bloomberg calls it “a celestial irony” that much of this spending is unnecessary, in light of the progress that SpaceX is making with its Starship megarocket.

Last month, SpaceX conducted a successful launch and landing of its Super Heavy Starship booster rocket, using mechanical “chopsticks” to pluck the rocket from midair as it descended to Earth. Barely a month later, SpaceX demonstrated in-space relighting of a Starship engine, followed by a successful water landing in the Indian Ocean. (Super Heavy also conducted a water landing, after being waved off from a tower capture attempt.) 

Soon after, the Federal Aviation Administration approved SpaceX to increase its launch cadence from Texas, from five to 25 flights per year — which could accelerate further development of the rocket. And as Bloomberg pointed out in his piece, once Starship is ready to begin work, SLS will “very likely” become unnecessary — and “Orion, Gateway, Block 1B [and] ML-2” as well.

SLS versus Starship

Unlike Elon Musk, Michael Bloomberg is a billionaire without a rocket company, and without any particular expertise on space. It’s unclear, therefore, how much influence his opinions might have on U.S. space policy. But even so, his arguments have merit.

Consider: As best we can tell, it costs SpaceX approximately $90 million to build one Starship today (and that price is falling). To move Starship from low Earth orbit to the moon and back requires building and launching eight other Starships to serve as refueling tankers for the first. And each Starship launch requires approximately $1 million worth of fuel.

Assuming these numbers prove out in practice, the cost to send one Starship to the moon and back should fall under $1 billion, versus $4.1 billion for SLS. (As further confirmation, SpaceX has already won two NASA contracts for purpose-built Starship lunar landers. The first will cost $2.9 billion, but the second costs much closer to my estimate: $1.15 billion.)

Combined with all the other savings from space infrastructure that won’t need to be built, the economic case for canceling SLS now seems clear. That’s good news for taxpayers, who may be able to return America to the moon much more cheaply now. For Boeing, however, it puts an $82 billion revenue stream at risk.

Caveat investor.