McCain, James Trade Barbs Over RD-180 Engines

At a hearing of the Senate Armed Services Committee (SASC) today, SASC chairman John McCain (R-Arizona) and Secretary of the Air Force (SecAF) Deborah Lee James engaged in a feisty exchange over Russian RD-180 rocket engines.   The two disagree on how many RD-180s the United Launch Alliance (ULA) should be able to obtain for launching national security satellites.  Today’s exchange focused on whether ULA should be prohibited from buying any because a restructuring of the Russian aerospace sector places the engines under the purview of two Russians who are sanctioned by the United States.

McCain challenged James’s knowledge of the new Russian space governance structure, repeatedly asking if she knew that two “cronies” of Russian President Vladimir Putin are now on the board that oversees the new Roscosmos state corporation.  In his view, they financially benefit from the sales of RD-180s because the company that manufactures them, Energomash, is now part of the Roscosmos state corporation.

Roscosmos was a government agency separate from the Russian aerospace industry, but was recently restructured into a state corporation with the same name that merges both sectors.  Dmitry Rogozin, Russia’s Deputy Prime Minister who oversees the aerospace sector, and Sergei Chemezov, both were sanctioned by the United States after Russia’s actions in Ukraine.  McCain asserts both serve on the new Roscosmos Board of Directors.  McCain argues that sales of RD-180 engines provide financial gain to those two individuals and therefore the sales should be stopped.  The U.S. Treasury Department is in charge of implementing sanctions and DOD acquisition chief Frank Kendall reportedly said last week that it has made a preliminary determination that the RD-180 sales do not violate them.

In his opening statement today, McCain said the Treasury Department’s determination reflects “a level of hypocrisy” that will “make it harder to convince our European allies to renew their own sanctions on Russia this summer.” 

The FY2016 National Defense Authorization Act (NDAA) limits to 9 the additional RD-180 engines ULA may obtain beyond 15 that were purchased as part of a 2013 Air Force-ULA block buy contract for Evolved Expendable Launch Vehicle (EELV) services.  ULA’s two EELVs, the Atlas V and Delta IV, launch virtually all U.S. national security satellites. The block buy was for 36 launches, 29 of which were Atlas Vs, which are powered by Russia’s RD-180s.  At the time of Russia’s incursion into Ukraine, 15 were purchased, leaving 14, of which 5 were under contract.  The Air Force and ULA have steadfastly insisted that all 14 are needed despite efforts to build a new U.S. engine to replace the RD-180s.  McCain insists that only 9 are needed (the 5 under contact plus 4 more), hence the language in the NDAA.   In recent months, the Air Force and ULA have been saying that 18 (not 14) more are required.

At today’s hearing, McCain repeatedly challenged James over whether or not she knew that Roscosmos now is overseen by individuals who are sanctioned.  

James insisted she does not know who makes money from RD-180 sales and the Treasury Department determined that purchasing them does not violate the sanctions.  In her opening statement, she said the sooner an RD-180 prohibition comes into effect, the more disruptive it will be and the more it will cost — $1.5 to $5 billion — and none of those costs are included in the Air Force’s FY2017 budget request. 

McCain sternly asked if she knew Roscosmos is the parent of the company (Energomash) that manufactures RD-180s.  She replied she had not studied the matter in detail but “if you say so, I believe you.”  McCain angrily honed in on whether or not she knew that the new Roscosmos, with Rogozin and Chemezov on its board, is the parent company.   James frostily rejoined “prior to you telling me this today, that individual aspect, no.  But I accept your word and I know it now.”  She insisted that the Treasury Department does not have Roscosmos on the sanctions list.

Sen. Jeff Sessions (R-Alabama) focused on the opportunity costs to the Air Force of ending use of RD-180s soon: “You really can’t make foolish decisions and incur more costs than is reasonably necessary….”   ULA builds the Atlas V and Delta IV in Alabama.

James’s estimate of the potential cost of ending use of RD-180s sooner rather than later reflects a potential need to shift satellites to the much more expensive Delta IV.  SpaceX also recently was certified to launch national security satellites with its Falcon 9 rocket, but Falcon 9 is not capable of launching the heaviest national security satellites.  The Air Force has announced four rocket propulsion awards for the development a new U.S.-built rocket engine to replace the RD-180, but it will take some time for them to be ready and integrated into a launch vehicle. The Air Force, ULA and Congress agree on the need to transition from the RD-180s to a U.S. alternative.  The debate is over the timing.

James told SASC member Sen. Bill Nelson (D-Florida) that assured access to space is the Air Force’s top concern.  She argued for more flexibility over when RD-180s no longer will be allowed. Nelson said he worries that there will be a gap between when RD-180s are prohibited, meaning Atlas V rockets are no longer available, and when new launch vehicles with new engines are ready.  The result would be that the expensive Delta IV Heavy rockets will be required to launch the majority of national security satellites, costing a lot of money.  James agreed. 

ULA President Tory Bruno estimates the cost of a Delta IV launch at $400-600 million versus $140-164 million on average for an Atlas V.

The RD-180 issue splits congressional defense authorizers, the House and Senate Armed Services Committees, who want to limit RD-180s, and appropriators, the House and Senate appropriations committees, who want flexibility.  

At a House Appropriations defense subcommittee hearing yesterday, James faced a much more friendly audience that agreed that flexibility is needed as to when the use of RD-180s should end.  Rep. Ken Calvert (R-CA) complimented James on the award of four contracts to build new rocket propulsion systems. He and subcommittee chairman Rep. Rodney Frelinghuysen (R-NJ) quizzed James on whether SpaceX could launch more national security satellites.  She said there are eight types of launches and SpaceX can launch four.  Calvert and Frelinghuysen focused on the need for assured access to space and James stressed that having a new U.S. engine ready by 2019, as required by law, is one thing, but it will not be integrated into a new launch vehicle and certified by that time, hence the need for flexibility on the availability of RD-180s.

Today’s SASC hearing ended on a combative note.  In its final moments, McCain challenged James on her earlier statement that terminating use of RD-180s could cost between $1.5 billion and $5 billion.  He cited a letter he received from James that day “after several months” of waiting saying that the cost would be “in excess of $1.45 billion,” but now she was saying up to $5 billion.  She rejoined that it is matter of what assumptions are made.  McCain had the last word: “I am to disregard, really, the letter you sent to me that I’ve been waiting several months for.  Maybe that helps explains some of the difficulties that we have.”