I wish I had time to fill your readers in on all of the insider history of this issue.

Suffice it to say that if the government provides indemnification for semi-risky launch vehicles, it removes a market incentive for developing more reliable launch vehicles. (Above and beyond the normal incentive to have a reliable product that works).

To carry the point further, if the government mandates the purchase of insurance from a oligopsony (very few providers) at a price that is a small share of an Atlas V’s launch price but a huge share of a SpaceShip 2′s launch price, then this policy discriminates against small-unit-price launch providers and in favor of large-unit-price providers.

Did Aerospace really look at these issues? No, because yours truly never answered Aerospace’s request for background info, because I was busy with client crises. Mea Culpa.

– the too-busy consultant

Retaining risk may not have cost the government money, but that’s just (one of the many times the government has used) accounting fiction. The implicit premium is pretty high. On the other hand, almost all the launches are government launches so the governement is the main beneficiary of the insurance. The excess liability “reverting back to the launcher” is also a fiction. They are surely insulated and leveraged in such a way that all the injured party would get is the launch company itself. The excess risk would be uninsurable except through Buffett. The good news is it might not cost very much. If the risk is retained by the launcher, it would just revert to the government because of the outer space treaty if the company or its insurer did not make good on it. Of course that is only if Congress funds it. It does have sovereign immunity after all.

It’s more interesting when there are more non-government cargos, especially humans with relatives who will sue.

I can, but before I do, I want to address the general applicability of “the saying about what it means to ask the same question over and over, expecting a different answer” to this case.

Clearly, one would have to be freaking insane to ask a question like, “What is two plus two?” over and over and expect a different answer.

However, a question like, “Should I change my auto insurance policy?” does not fall in that category. The answer to that question could change depending on events like driving record, rate changes, buying a new car, or having triplets turn 16 and get driver’s licenses. In my opinion, not only is asking the question periodically not insane, it would be insane not to ask the question at least when the policy renewal notice arrives in the mail.

In my opinion, the question of US government liability risk sharing for commercial launches is more like the latter question than the former, and I’m somewhat surprised that a close observer such as yourself would think otherwise (in fact, if I didn’t know better, I’d accuse you of being coy in questioning it). In particular, the launch market is in the early stages of a transition from mature operations of a duopoly with decades of experience to operations of a large number of companies with little operations experience. That could result in changes to the government’s risk exposure under the current regime.

http://www.spacelawstation.com/veddariskliabilityreport.pdf

(And I’m not sure why FAA/AST has not posted this yet. It will no doubt appear on their site eventually…)

Regards,
Jesse

If market conditions were static, you’d have a point. But they are – and they are about to change more rapidly – so you don’t.