The Obama administration recently announced its 2010 proposed budget, which includes $18.7 billion for NASA with a blueprint for retiring the space shuttles in 2010 and returning to the moon by the end of the next decade. But retiring the shuttles means that the United States is without a vehicle to travel to space until 2015, when NASA’s next launch vehicle, the Ares rocket, is expected to make its debut.

In the interim, NASA must rely on the Russians’ Soyuz spacecraft and the commercial sector to carry crew and cargo to the International Space Station (ISS), a $100 billion U.S. taxpayer asset.

Space Exploration Technologies (SpaceX) is a private company that won a $1.6 billion contract in December through NASA’s Commercial Orbital Transportation Services (COTS) program to provide the agency with a launch vehicle capable of reaching ISS.

Technology Review spoke with Lawrence Williams, vice president of SpaceX, about the retirement of the shuttles, NASA’s decision to partner with the private industry, and SpaceX’s rocket design.

Technology Review: How does the retirement of the space shuttles, and more recently Russia’s decision to stop taking paying passengers aboard the Soyuz spacecraft, affect the commercialization of space?

Lawrence Williams: People are so used to the U.S. having access to the space station that it has not really sunk in for most people that in 2010, under the current plan, the U.S. will no longer have its own vehicle, certainly [not] one with crew capability, to access space or the space station. We are going to be limited in the type of missions we can launch. The only option, without using companies like SpaceX, is to use the Russians, which is not a politically popular one.

NASA’s plan therefore is to rely on the commercial sector to provide cargo capabilities to the station in the interim, until the successor system to the shuttle, the Ares-Orion program, is ready. So SpaceX and [a company called] Orbital Sciences have contracts to take cargo to ISS in that interim time period. We also have an option on our contract, which NASA has yet to exercise, that would allow us to also carry crew to space. In the absence of SpaceX taking crew, our only option, again, is the Russian Soyuz, which is how [the latest] space tourist, Charles Simonyi, is currently planning to travel to space. I think the Russians have decided to stop flying tourists because they are going to have to start flying a lot more U.S. astronauts.

TR: Can you expand on the terms of your contract with NASA?

LW: We have been awarded a contract to develop first the capability to just do cargo, and eventually demonstrations with crew, although NASA has yet to exercise that part of the contract. But we are developing our system with the plan in the future to evolve into carrying crew. The capsule that we have designed is a flexible system, so basically instead of carrying cargo to the space station you put in seats and a crew life-support system. We are currently the only company under contract with NASA to do crew, although again, that option has not been exercised.

The second part of the contract is for $1.6 billion for 12 flights of actual cargo. In other words, the first three flights are demonstration missions as part of the COTS program, and the 12 flights are actual cargo supply, and they start at the end of 2010.

TR: What’s your schedule for the flight-demonstration missions?

LW: We are flying the booster later this summer without the cargo capsule on it. Then we will fly booster with the cargo capsule for our first demonstration flight the last quarter of this year [launching from] Cape Canaveral. We won’t actually dock to the station, but we will be doing a demonstration flight of our capsule design and are scheduled to do the first docking with the station mid-2010. If we started doing crew development today, we think we could do the crew demonstration in 24 months.

TR: Is there a reason NASA has not started working with you for crew capabilities?

LW: Funding.

TR: So does NASA need more government funding to exercise some of these capabilities?

LW: To a certain extent yes, but it is also a question of priorities: they have been spending a lot of money on the Ares-Orion, which is the next government system that should allow us to go back to the moon and Mars, and that system has been over budget. So it has been a question of spending money on that system or on commercial ventures. We are trying to develop a system that is mostly funded by the private sector–our founder and CEO put up the majority of the money to develop our capability–and we would like the government to be a big customer, but they are not our only customer. The government is not managing and running our program like they are with the space shuttle and the Ares-Orion. It is a different approach, but historically it has been a more efficient approach.

TR: How is your rocket designed, and how does it compare to Ares?

LW: What NASA is developing is really a completely different system. They are developing a system that is designed to support missions to the moon, Mars, and beyond. We have developed a system that will only have a small fraction of the capabilities of the Ares-Orion program. Therefore, the Ares-Orion is far overdesigned to go just to the space station, and we are far underdesigned to go to the moon.

What we have designed is similar to the Russian Soyuz and Progress spacecraft, and what [NASA] has developed is similar to the shuttle, but without the same amount of cargo capability in terms of mass, and without the winged design.

We developed a booster called the Falcon 9. On top of that booster, you can put large satellites, up to a five-meter fairing, or you can replace that fairing with a capsule called the Dragon. The Dragon is like a Gemini or Apollo capsule design, so it is a proven system, but we also have a unique trunk section that allows us to carry unpressurized cargo outside of the pressurized capsule.

TR: How does your approach stand out from those of other commercial space companies?

LW: The difference between our approach and what everyone else is trying to do is that we are so vertically integrated. We manufacture most of the vehicle, the booster as well as the dragon, in house. We don’t have a large number of subcontracts, so we can do things much more efficiently, and we control the quality and cost of the manufacturing process.

TR: What is the next phase–more development?

LW: For the most part, that is the end of the development phase for the cargo version. We would like to be able to work on the crew development, which includes developing an escape tower, life-support systems, and all the additional capability needed. Like I said, it has been manufactured and designed from the beginning to evolve to crew, so it is not a whole new development. But we obviously need to develop some additional aspects of the system.