Speech

AIAA Event on Entrepreneurial Space and Export Control

Good afternoon. Thank you for inviting me to participate in today’s discussion.

Let me begin with a word from the noted psychologist, Dr. Gordon Allport.

For 37 years he was a distinguished member of the Harvard faculty, doing pioneering work in understanding personalities. But one day, after years of serious, devoted effort, he basically threw up his hands and was moved to say this:

“So many tangles in life are so ultimately hopeless that we have no appropriate sword other than laughter.”

Now, I’m not sure why that reminds me of ITAR, but somehow it does. Maybe it’s because it’s a tangled issue. But it’s clearly no laughing matter. And it’s certainly not hopeless.

It’s just very hard.

I’ll give you an example.

Let’s say that in your work, it’s your responsibility to protect the public; to protect the national security and foreign policy interests of the United States; and, at the same time, to encourage, facilitate and promote your industry.

When you think about it, that’s what we do all the time at the Office of Commercial Space Transportation, because it basically reflects our mission statement with regards to commercial launch and re-entry activities.

It is also representative of the struggles we face with ITAR.

Encapsulated in that mission statement is the whole “ITAR dilemma,” in which you have three vital and valid concepts — public safety; national security; and industry promotion — colliding at times in a competitive and turbulent environment, where the world is smaller than it has ever been, and the stakes have never been higher.

And, of course, we’ve all known this for some time.

Nine years ago, back in the summer of 2000, COMSTAC, our Commercial Space Transportation Advisory Committee, produced a position paper that underscored how important trade and world commerce are to our industry.

Let me share with you a very brief excerpt.

“Export controls,” the paper said, “impact virtually all manufacturing and service elements of the commercial space industry” including, it continued, “related aspects such as insurance and the creation and expansion of markets for space-related products and services.”

The paper went on to say that export controls “represent one of the most important issues faced by the commercial space industry today.”

So, there you have it. Nine years ago, COMSTAC said export control was important.

And the fact that it’s important hasn’t changed. But I would point out that the fact that it hasn’t changed much since that time is also important.

The list of reasons for its importance is very long, but here’s some evidence of why it’s important to commercial space transportation.

A year ago this month, my office released a report called “The Economic Impact of Commercial Space Transportation on the U.S. Economy.” Here are the three key results for calendar year 2006:

• $139 billion in economic activity;
• $35 billion in earnings;
• 729,000 jobs.

I think that pretty well explains why export controls get so much attention. To emphasize the point, the California Space Authority just last week released a report showing that our industry is a key contributor to the state’s economy.

Combine these two studies with the Space Foundation’s recently released “Guide to Global Space Activity” and you have indisputable evidence that space is a vital economic activity, and that its reach is truly global.

We have already heard this afternoon from industry representatives who see the need for improvements in export control. While my office does not have primary responsibility in the policy making arena, I can tell you that we hear concerns all the time about the need to reassess and revise things as the commercial space industry grows, and especially as it evolves from exclusively being a carrier of payloads into the business of carrying people into space.

I can attest to the fact that although what we are hearing today originally began as a few lonely voices in the wilderness, who were making the point that commercial space needed a revised export regime, those voices now seem to be growing into a full-throated chorus with orchestral accompaniment.

We can certainly hear the music at the Office of Commercial Space Transportation.

In the past three years my office has participated in the CSIS study on the “Health of the U.S. Space Industrial Base and the Impact of Export Controls.” That study was originally begun by the Defense Science Board.

We were also part of an Air Force Study called the “Defense Industrial Base Assessment: U.S. Space Industry.” This study contained an extensive survey of U.S. companies, and was prepared by the Department of Commerce’s Bureau of Industry and Security. It was conducted by the DoD, through the Under Secretary of the Air Force and the Space Industrial Base Council.

Just last October, our industry Advisory Committee, COMSTAC, underscoring the view expressed at the beginning of the decade, established a new Export Controls Working Group chaired by Mike Gold.

And last year, the FAA and the Department of Commerce released a guide book called the “Introduction to U.S. Export Controls for the Commercial Space Industry.”  The booklet is intended to serve as a starting point for commercial space companies as they begin navigating what can sometimes be a rather cumbersome process to gain the necessary approvals in order to export their products and services. It’s available on our web site if you would like to have a copy.

We are very much aware that questions surrounding export control can be controversial, and that they extend to many sectors of the economy, not just the one in which we have such an intense interest. But even within our one piece of the puzzle there are a host of secondary issues that can pose challenges.

What it comes down to is that we operate under policies, put in place a number of years ago, that have essentially remained constant, while not only the ground, but the sky above and the space above that have shifted significantly.

The story isn’t new. Once you match established practice with changing times, you can get a lot of people chipping flint as one century rubs against another.

We all know how important this is.

That’s why the Office of Commercial Space Transportation is willing, and in fact eager, to be part of the search for the best approach on export controls. The conversation has already begun. It will likely become more intense, more focused, and eventually, a subject upon which votes will be cast.

I believe, therefore, that it is up to all of us to do what we can to make sure that when updated policies are issued, they have been shaped by the clearest, most-persuasive evidence that industry can muster to help our policy makers end up with the best possible outcome for our nation.

The issue of export controls is, in fact, a very tangled subject. How it is eventually resolved will be a major factor in deciding where America ends up in the global competition related to commercial space transportation.

Thank you very much.