Legislators: 'Spaceport America Could Become a Ghost Town'

RocketAcademy writes "A group of New Mexico legislators is warning that the $200-million Spaceport America 'could become a ghost town, with tumbleweeds crossing the runways' if trial lawyers succeed in blocking critical liability legislation. The warning came in a letter to the Albuquerque Journal [subscription or free trial may be required]. Virgin Galactic has signed a lease to become the spaceport's anchor tenant, but may pull out if New Mexico is unable to provide liability protection for manufacturers and part suppliers, similar to legislation already passed by Texas, Colorado, Florida, and Virginia. The proposed legislation is also similar to liability protection which New Mexico offers to the ski industry. An eclectic group of business and civic interests has formed the Save Our Spaceport Coalition to support passage of the liability reform legislation, which is being fought by the New Mexico Trial Lawyers Association."

Comments

Let's compromise

[ThatsNotPudding]

Complete the port and then shoot the trial lawyers into space.

Yep there goes our civilization

[Whatsmynickname]

And this folks is precisely why we never get anything done anymore... Between the lawyers / politicians / managers who "just want to get along", we will just sit here and spin our wheels until our society falls apart.

Re:Yep there goes our civilization

[TubeSteak]

Virgin Galactic has signed a lease to become the spaceport's anchor tenant, but may pull out if New Mexico is unable to provide liability protection for manufacturers and part suppliers, similar to legislation already passed by Texas, Colorado, Florida, and Virginia.

Allow me to translate:
Virgin Galactic has signed a lease to become the spaceport's anchor tenant, but may pull out if New Mexico is unable to provide liability subsidies for manufacturers and part suppliers, similar to subsidies already passed by Texas, Colorado, Florida, and Virginia.

Virgin is asking to be protected from paying insurance on the full cost of the risk it is creating.
I'm not saying I'm against it, just that we should call this "protection" what it is: socializing the risks and privatizing the profits.

Re:Yep there goes our civilization

[garyebickford]

As a physics professor once said, "Your thesis is not even wrong" - it's nonsense. Sorry, but you need to do some research. Because of the egregious nature of the present tort system, the liability is essentially unlimited, and would require insurance premiums many times larger than the total cost of the product.

Under present NM law, if a rocket causes a sonic boom then everyone in the state could sue Virgin, the Spaceport and every business that provides parts or fuel or services to them - whether they heard the boom or not! Settling at, say $100,000 per person times the 2 million people in NM is $200 billion - well outside the range of insurable amounts. Another example - "the exhaust of these infernal rockets caused my asthma to act up" - even though I live 200 miles away and upwind.

The above is not a joke - similarly ridiculous suits have been successful, and in fact such suits destroyed the US general aviation industry, where insurance premiums exceeded actual manufacturing costs, and were anticipated to exceed the actual sale price of parts. A similar legislative fix finally saved a small portion of the GA industry, after 90% of the makers had gone out of business or left the industry.

The whole rise of 'kit' airplanes was a response - if an airplane was over 50% manufactured by the hobbyist, all the liability rested with him/her. This meant that a kit manufacturer was mostly home free on liability, and the cost of the plane would be between 1/4 and 1/2 what a manufactured plane would cost.

(Recognize that at present, between up to 2/3 of your total medical bills are purely going to liability insurance, and that is a very predictable product liability-wise. A heart surgeon pays between 1/3 and 1/2 their gross income as insurance. Then there is the built-in cost of insurance on every facility, every part, every sterile package, etc.)

At present, my understanding is that every state with any significant space-related industry has some form of limitation on liability to force some sense into the system and prevent novel new interpretations of the law from biting the industry. If NM wants to become a space-related state, it will have to do the same.

If rockets worked, this wouldn't be a problem

[Animats]

After more than half a century of big rockets, they still crash far too often. About 5%-10% of satellite launches still fail. Chemically powered rockets have to be weight-reduced to the point that they're inherently unreliable.

Boeing doesn't have legislation protecting them if one of their airliners crashes onto somebody's house. They carry private insurance for that. If affordable insurance isn't available from the private sector, the technology isn't safe enough for use by private parties.

The previous administration in New Mexico was involved in some major boondoggles. There's this spaceport, which is way overbuilt. There's the reposessed supercomputer. More recently, there was that bogus empty test city in the desert project. New Mexico keeps trying to monetize all that desert, but it's not working.

Re:If rockets worked, this wouldn't be a problem

[climb_no_fear]

This paper suggests between 0.2 and 3% for a well established rocket (i.e., the end of the learning curve).

http://onlinelibrary.wiley.com/doi/10.1002/9780470714461.app11/pdf

Re:It sounds like more

[NigelTheFrog]

If the business can't generate enough cash flow to pay the liability insurance bill, maybe the business shouldn't exist.

But if they can just go a couple of states over and not have to pay, they'd be crazy to stay.

Re:Suspicous

[Lisias]

A crashing rocket can fall over the entire America, not only New Mexico.

I'm sure I'm far from 100% right, but as far as I know, rockets commonly explodes on lauchpad, or are emergency destroyed a few kilometers high, when the debris fall out over a relatively small (and manageable) area.

There're exceptions, as the two Space Shuttle accidents. But IMHO, people living near an prosaic airport are far more endangered than the guys at New Mexico.

However, crashing rockets are not the only problem a spaceport (and its neighborhood) can suffer.

Re:Suspicous

[Thud457]

so who is responsible if the rocket crashes into someone's home?

Konstantin Tsiolkovsky.

Why can't these spaceports just be required to carry some amount of insurance? You know, let the free market do its work. If people value shooting rockets into space more than not having an occasional house squashed by a failed rocket, we'll have rockets.

"Rocket corp is a real person(tm), just like you. Except that you can be sued into poverty if you happen to drop a rocket on somebody's house."

Re:Suspicous

[sycodon]

As soon as they can fire the first rocket, they need to gather ALL the members of the New Mexico Trial Lawyers Association and load them up and shoot them into orbit...forever or until they burn up in the atmosphere.

Let me get this straight...

[wierd_w]

There's a special interest group --for lawyers-- to pressure lawmakers to make laws --for the benefit of lawyers-- to maintain an intractible wall of legal liabilities, so said lawyers will never run out of people to sue?

And we are taking it.... seriously?

For real?

Coming from an industry that makes flagrant use of offset liabilities and liability law loopholes (the legal profession), this seems to be not only pathologically stupid and self destructive, but also blatantly hipocritical.

Seriously, an association for trial lawyers?

Re:Suspicous

[the gnat]

There're exceptions, as the two Space Shuttle accidents

The 1996 crash in Xichang, China was almost certainly far more deadly - the rocket almost immediately crashed into a nearby heavily populated area. It's not actually clear how many people died, since the government of course has a monopoly on information.

Re:Why not?

[sunking2]

I believe it was actually Reagan who implemented the phone subsidy program. What everyone should really be upset about is why it took a Mexican company to figure out that they could make money by offering a cell phone and plan cheap enough that you could afford the whole thing with the subsidy.

Re:Suspicous

[garyebickford]

Because, without the legislation being offered, the potential liability is essentially unlimited, and forever. The general aviation industry was plagued and almost destroyed by excessive liability. This was partially fixed by a law in the late 1990s (IIRC) removing the 'long tail' liability.

As an example from when I was living in CA back in the 1980s, a pilot forgot to put gas in his 35 year old Cessna, took off and crashed into a house about a mile from the airport. The homeowner was killed (along with the pilot). In addition to the pilot's estate, the homeowner's estate sued the manufacturer of every part in the airplane for negligence. One company, a builder of starters or generators (I forget which) spent $2 million in 1980s money in legal fees, proving that their generator was not even on the plane! That company then ceased building any parts for airplanes, as their gross sales for those parts was only a few $million per year and insurance costs would have been higher than the manufacturing cost.

Not much later Cessna ceased building general aviation planes (except for the Citation jets), and said that they would start again once the liability laws were fixed.

The 'long tail' law basically put a cap of (IIRC) 20 years on defective part liability for manufacturers. The basic idea is that if a part has lasted 20 years, it's probably not defective in any rational sense. Once this law passed, I think Cessna did in fact resume low levels of production.

Rockets are going to be considered 'fun rides for elite snobs with too much money' even more than airplanes. So, bottom line - without some legislation, in the event of a crash, a falling part, or a loud noise as it flies over, the trial lawyers would be able to sue the Spaceport and Virgin Galactic and everyone who ever mentioned the word 'rocket', on behalf of every individual in the state, whether or not they had even heard or seen anything or even knew something was flying that day. There are already federal and state laws (for the states that do a lot of space activities) limiting liability for commercial space launches. This legislation would do the same for New Mexico. Without it, NM will not ever be a space-business state.

Re:But this is BS:

[garyebickford]

Serves me right for not RTFA. :) However I think your argument VSV the ski industry is backwards. The limitation of expectations there were first developed when skiing was much less predictable and the equipment was much less reliable - much like the private space industry now in a sense (though I suspect everything WRT space is so challenging that the reliability of individual parts is usually much better than ski parts.)

And I would agree with Burt Rutan on the auto parts. Auto manufacturers have to make stuff that handles just about everything that a space craft would throw at it except for the greater extremes of temperature and pressure, and make it last for 100,000+ miles. That stuff has gotten pretty d_mn reliable, and robust against heat, cold, vibration, dust, electrical weirdness, etc. But those parts are an order of magnitude cheaper than similar items on an airplane that are actually less reliable and less advanced, due to the cost of getting FAA and FCC approval, said cost being amortized over only a few thousand units. My case in point - without going into detail, in the early 1980s you could buy a $50 CB radio that was better in all ways than a $2500 airplane radio. The difference had a lot to do with the fact that if you changed the value of a single resistor in the airplane radio it could cost $1 million (in 1980 dollars) to get through both FCC and FAA approvals again. That cost was amortized over maybe 2000 units = $500 per unit.

In fact, that's an argument for allowing the space folks to bypass some types of FAA approval (they are also subject to NASA approvals), to allow faster development and improvement, and allow the market to establish the necessary level of reliability. None of these companies - Space-X, Virgin Galactic, Blue Origin, etc. - have any interest in failures due to poor quality parts, workmanship, design or engineering at this point. I'm not 100% convinced of this argument, but it's one worth making.