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Private Space Industry Eyes State's Open Spaces

Home to NASA's Johnson Space Center, Texas is no stranger to the field of space exploration. But now the state could become a hub for a new space economy — one based in the private sector.

Jennifer White, a public relations liaison for the U.S. Fish and Wildlife Service, looks over a map of Boca Chica Beach in South Texas. The map shows the protected area’s privately owned parcels; one could become a SpaceX launchpad site.


When XCOR Aerospace, a private California rocket-building company, was looking for a wide-open place to test rocket engines and space planes, it found an ideal site in Midland.

“There’s nothing in the desert for hundreds of miles,” said Mike Massee, a spokesman for the company. XCOR plans to set up facilities in an existing Midland hangar next year and could eventually invest $12 million a year in payroll there, Massee said. “That’s something that’s very desirable.”

As home to the NASA Johnson Space Center, Texas has been central to the field of space exploration for decades. But XCOR’s announcement is only the latest indication of many that the state could be on its way to becoming a hub for a new space economy — one based in the private sector. Texas’ location and business-friendly policies make it appealing, industry experts say, and if the private space industry takes root, it could inject millions of dollars into the state economy.

SpaceX, another California-based company, which recently sent an unmanned capsule to and from the International Space Station, is evaluating a location near Brownsville for a launchpad and expanding a rocket-testing facility in McGregor. Blue Origin, a Washington-based company headed by Jeff Bezos, the founder of, has a launchpad in West Texas.

Though private space companies considered investing in Texas 20 years ago, the technology for them to succeed was not yet in place, said Alex Ignatiev, a University of Houston professor whose research has received NASA financing and who has advised space companies. Now, he said, Texas is eager to attract private space companies, and the technological and financial resources are there.

In addition to a new “confluence of entrepreneurs and technology,” he added, “the nation’s need for access to space” is acute, now that the space shuttle program has ended.

Private space companies are particularly appealing to Texas in the wake of that program and as NASA faces budget cuts. Although the shuttles were launched from Florida, the program’s mission control was at the Johnson Space Center in Houston.

Gov. Rick Perry has expressed interest in promoting the private space industry in Texas and has met with Elon Musk, the chief executive of SpaceX, many times. In July, Perry discussed the industry’s future with representatives from several companies.

Though the state encourages space firms to come to Texas, it has not, so far, lured them with financial incentives, said Lucy Nashed, a spokeswoman for Perry. The governor’s office is talking with XCOR about whether the Midland project would be eligible for state money, but the company must prove it would create jobs, she said.

Initiatives like the state’s Enterprise Zone Program, which supports companies that bolster struggling economies, could be useful to space firms because they often settle in economically challenged rural areas, Nashed said.

Special incentives aside, Texas is attractive to space companies because of its low business taxes, Massee said. The state’s location also helps. Rockets can be launched faster when they are closer to the equator, said Bob Lancaster, president of the Texas Space Alliance, an advocacy group. SpaceX is considering a site in Cameron County, the state’s southernmost county.

But environmentalists are concerned about the impact of potential space facilities.

The advocacy group Environment Texas is petitioning for SpaceX to abandon its Brownsville plans. The proposed Gulf Coast site, which comprises about 50 acres, is surrounded on three sides by Boca Chica State Park, home to rare species like the ocelot and the leatherback sea turtle, according to a letter that the Texas Parks and Wildlife Department sent to the Federal Aviation Administration in May in response to questions about the potential environmental impact of the plan.

Gilberto Salinas, the executive vice president of the Brownsville Economic Development Council, countered that SpaceX had a history of complying with environmental regulations and said he believed the company would protect species in the park.

The launchpad, Salinas said, would use five to eight acres, leaving a “buffer zone” around it.

The facilities would cost SpaceX about $80 million to build, Salinas said, though SpaceX did not confirm that figure. He estimates that developing the site would inject $50 million in annual salaries into Brownsville’s economy and add $20 million to $30 million per year in related costs.

“It would just totally change the way things are done down here,” he said.

NASA, meanwhile, is itself contributing to the growth of the private space industry. As congressional budget cutters have taken aim at the agency, granting it $17.77 billion in federal money for fiscal year 2012, a decrease of about 4 percent, the agency is having to “learn to be efficient with less,” said Josh Byerly, a spokesman for the Johnson Center. (He added that NASA was not “limping along” under the cuts.) With the end of the space shuttle program, experts say commercial companies could provide most low-orbit space travel, potentially at lower cost to NASA.

According to the agency, Blue Origin, as of June 30, had received about $17.8 million from NASA to transport space crews into lower orbit. SpaceX had received about $70 million for crew transport and about $751.2 million to develop and restock low-orbit cargo stations. And on Aug. 3, the agency awarded SpaceX $440 million to refine its existing spacecraft to transport NASA astronauts.

Because private companies are focused on profit, they are likely to develop cheaper models for low-orbit travel,  Lancaster said, like reusable rockets.

Texas is not alone in attracting space companies. Experts say competitors include Alabama, California, New Mexico and Virginia.

Florida, home to the NASA Kennedy Space Center and one of Texas’ top competitors, created a state agency, Space Florida, in 2006 to promote space-related business.

Although Texas does not have a space department, staff members from the Office of Economic Development and Tourism work with companies and write letters on their behalf, Nashed said.

“This is an industry that has a lot of potential to grow in Texas,” she said. “The sky’s the limit.” 

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