SpaceX And Blue Origin’s ‘Boom’ | The Brainstorm EP 134

**Brett** (0:00)
One of the largest explosions of a rocket I have seen, maybe that anyone has seen, this past week, Blue Origin exploding on the pad. This is a big setback for them, a big setback for the United States, for NASA trying to get to the moon.
Daniel, great to see you in person.

**Daniel Maguire** (0:21)
Yes, yeah, I dressed up for the occasion. I wore my shirt, yeah.

**Brett** (0:27)
What, I also dressed for the occasion. What do you make of this, in the context of US space policy, SpaceX on the verge of going public, Starlink versus what Blue Origin is working on? Can you contextualize it for us?

**Daniel Maguire** (0:47)
Sure, so maybe just to explain what happened. So Blue Origin's rocket called New Glenn was taking its fourth flight. It was conducting a test fire on the stand and unfortunately, it blew up. The most notable thing is that it blew up on stand, which pretty much destroyed its whole launch complex for the most part.
That was the thought at the time. Why the timing was unfortunate is just two days before New Glenn or Blue Origin got like a $470 million contract from NASA to deliver vehicles to the moon in 2028
So at the time, a lot of the commentary was saying that the damage that they could see from imagery looks like it will probably push the nearest launch out by at least a year. Because it was their only operational launch pad. However, thankfully today, the CEO Dave Lim came out and said that it looks like a lot of the long lead items for the complex are actually still intact and he's optimistically confident that they can launch towards the end of this year. So that's what happened and then maybe just some quick implications and I'm sure we can go back and forth. But firstly, it really just shows that vertical integration is important because there's a lot of satellite providers that were really relying on launch providers, which is already a constrained market. Amazon's Project Leo already came out a couple of weeks or months ago and said, we're building so many satellites, but we can't get launch vehicles. So it was pretty heavily reliant on New Glenn. It was also playing an important role in NASA's mission to get back to the moon. So contingent to see how long that will be delayed based on the 12 month and then also just the industry falling back on SpaceX again and reliance on the Starship program. So yeah, a lot of kind of implications, but they're kind of the first take so far.

**Sam** (2:33)
Yeah, I don't know if it's actually necessarily even good for SpaceX, as in I think SpaceX, particularly Falcon Heavy can potentially take some of the volume that otherwise was going to go to New Glenn. But SpaceX has a lot of execution in front of it and huge return on capital potential in just building Starlink satellites, sticking them in the Starship rocket, getting that reusable and launching it. And the space business is a capital-efficient way to produce launch vehicles, I think is a good way to think about it, and to fund R&D for launch.
But they don't necessarily want to have to devote resources and bandwidth to picking up some of the schedule that would slip from New Glenn in Falcon Heavy, just because they have such an amazing set of commercial prospects on the other end. So I do think it's really good news, I think for SpaceX and for the industry as a whole. If Blue Origin can launch again within a year, that would be very, very, very positive relative to what we're anticipating based upon the tremendous like Oppenheimer level, Christopher Nolan, IMAX camera explosion that was on the launch pad, you know.

**Nick** (3:53)
Question for OE, what and how many launch facilities are active in the US or how many does SpaceX have?

**Daniel Maguire** (4:02)
So in terms of active, I don't know off the top of my head. SpaceX has, I know it has maybe four or five, you know, off the top of your head. It depends on what rocket they use.

**Brett** (4:10)
And they're constructing a number more for Starship.

**Daniel Maguire** (4:15)
Yes.

**Nick** (4:16)
Blue Origins only.

**Daniel Maguire** (4:17)
Only operational. They're constructing one actually close by to it and then another one in Vandenberg, California. But again, they wouldn't be ready within 12 months. I think the thought is that they'll just rebuild what was destroyed.

**Sam** (4:30)
In our modeling, SpaceX needs to build on an order of $8 to $10 billion of launch pads over the next couple of years to support the Starship. And these launch pads are really expensive. And there's no better evidence than what ULA was trying to do where Bechtel had this contract for, I think it was a couple hundred million dollars and now they've spent like a couple billion dollars and they haven't completed a launch tower for kind of the United Launch Alliance. And so SpaceX obviously is doing it cheaper because they're not on a cost plus contract. That's actually their own money they're spending.