NASA's Multibillion-Dollar Bet on the Moon: Good News for Space Companies, and for Taxpayers Too

NASA's Multibillion-Dollar Bet on the Moon: Good News for Space Companies, and for Taxpayers Too

nine years, tops — NASA wants to put American astronauts back on the moon. And that’s probably prudent. After all, it’s been nearly 50 years  since the last time anyone visited it. If NASA is ever to successfully send humans to Mars, it should probably brush up on its extraterrestrial landing skills first — and the moon is a convenient place to practice.” data-reactid=”11″>In as little as five years’ time — nine years, tops — NASA wants to put American astronauts back on the moon. And that’s probably prudent. After all, it’s been nearly 50 years  since the last time anyone visited it. If NASA is ever to successfully send humans to Mars, it should probably brush up on its extraterrestrial landing skills first — and the moon is a convenient place to practice.

But how much is it going to cost?

Space Launch System rocket lifting off

Image source: Getty Images.

It’s about to get a lot bigger, though.

Last week, CNN interviewed  NASA Administrator Jim Bridenstine about the Artemis project to return to the moon, and asked him straight out: “Can you put a dollar amount on [the all-in cost for Artemis]?”

“We’re looking at between $20 billion and $30 billion,” said Bridenstine, “spread over five years.”

Space Launch System (SLS) project — only one of several potential rocket options for sending astronauts to the moon, but the one NASA’s spent the most money backing thus far. The “$20 billion to $30 billion” quote is also additional to NASA’s base budget of approximately $20 billion annually.” data-reactid=”32″>Notably, this sum does not include the $12 billion or so  that already spent on NASA’s over-budget and behind-schedule Space Launch System (SLS) project — only one of several potential rocket options for sending astronauts to the moon, but the one NASA’s spent the most money backing thus far. The “$20 billion to $30 billion” quote is also additional to NASA’s base budget of approximately $20 billion annually.

Thus, to pay for Artemis, NASA will have to hit up Congress for a budget increase — something on the order of $4 billion to $6 billion annually for a minimum of five years. (There’s still some skepticism about the agency’s ability to get back to the moon in less than a decade, no matter how much money Congress throws at the task.) To which point, Bridenstine admits: “We’re negotiating within the administration” to get the necessary funds added to NASA’s budget, and will also need to ensure “that our members of Congress are interested and willing to support that effort.”

(NYSE: BA) for example — prime contractor on the SLS rocket– earns 6.8% profit margins on revenues from its defense, space and security business. Lockheed Martin (NYSE: LMT), in charge of building the Orion space capsule that will fly atop the SLS, earns an even more robust 10.5% operating profit margin on its space business (according to data from S&P Global Market Intelligence). So depending on precisely how much Artemis ends up costing, and which specific companies win the contracts, it’s likely Artemis could be worth an additional $272 million to $630 million in space industry profits … every year … for the next five to nine years, or longer.” data-reactid=”36″>To put that in investing terms, a company like Boeing (NYSE: BA) for example — prime contractor on the SLS rocket– earns 6.8% profit margins on revenues from its defense, space and security business. Lockheed Martin (NYSE: LMT), in charge of building the Orion space capsule that will fly atop the SLS, earns an even more robust 10.5% operating profit margin on its space business (according to data from S&P Global Market Intelligence). So depending on precisely how much Artemis ends up costing, and which specific companies win the contracts, it’s likely Artemis could be worth an additional $272 million to $630 million in space industry profits … every year … for the next five to nine years, or longer.

Even for a company like Lockheed, with $5.6 billion in annual profits, or Boeing, with $10.1 billion, these are not insignificant sums.

And yet, there’s good news here for taxpayers as well as for investors. While there’s little doubt that America’s space companies will profit mightily from their participation in returning humanity to the moon, it’s worth remembering that when we first did it in the 1960s and 1970s, the total cost of the Apollo Space Program was approximately $150 billion (in present-day dollars ).

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