Hopes for US space station lift off again. Former astronaut wants to be `landlord' of orbiting industrial park

After a period of apathy and dismay following the Challenger disaster, the United States appears to be reentering - if only at a crawl - the race to commercialize space. Joseph Allen, for one, plans to be a part of that race. This former astronaut-turned-businessman wants to be landlord of the first industrial park in space. In his mind's eye he can see it floating in frigid solitude 230 miles above the earth - a $500 million, 35-foot-long, 14.5-foot-wide space station, or Industrial Space Facility (ISF).

Not to be confused with the $14.6 billion publicly financed space station being built by the National Aeronautics and Space Administration, Dr. Allen's ISF is a much smaller, for-profit effort.

``We are like a general architects' firm that has designed a fairly substantial office building,'' says Allen, marketing director of Space Industries Inc., of Houston. ``We have taken the ISF this far on speculation, the conviction that it is important, and that there will be a market.''

But the long-term success of ISF is strongly linked to the gradual deployment of NASA's space station, which seems likely to be hit hard by the recent congressional budget cut compromise. NASA has gone ahead bravely, recently awarding $5 billion in space station contracts to Rockwell International, McDonnell Douglas Astronautics, Boeing Aerospace, and General Electric despite the threat. The space station was supposed to be built by 1994, but probably won't be finished until later.

A self-proclaimed optimist, Allen sees reasons to be hopeful even though the ISF is just a schematic drawing at this point. Allen says the ISF will be in orbit by 1992. But whether it ever flies depends most on US businesses, and whether they will commit to lease part of it. Success also depends on the reliability of the space shuttle.

Yet, a number of experts say ``cautious optimism'' is growing.

``There has been a subtle shift in mood, from dead in the water to a greater anticipation,'' says John Egan, who heads the Egan Group, a consulting company in Washington, D.C., which helps prepare business plans for companies trying to get research projects into space.

Reasons for the shift in mood include the following:

A fast-approaching date for launching the first manned space shuttle launch since Challenger, scheduled for next June 2.

Nearly $5 billion in space station contracts have been awarded. Presidential and congressional political support for it remains strong, though it is likely the recent $76 billion budget cut will slow deployment.

The appointment of James Rose, an experienced aerospace industry executive and commercial space research expert to head the recently reorganizaed Office of Commercial Programs at NASA.

Advances of rival nations - the Soviet Union, Japan, France - in crucial areas. The Soviets, for example, have had a series of manned space stations in orbit since the early '70s; and the French have excelled in remote sensing satellites and launch vehicles.

Excitement generated by private launch services has been one notable exception to the period of sluggish interest in commercial space activity. Since Mr. Reagan mandated private companies to launch most commercial payloads, a bevy of US start-ups and aerospace giants have been vying to launch satellites and experimental packages into orbit.

But Peter E. Glaser, an authority on space applications and vice-president at Arthur D. Little Inc., in Cambridge, Mass., says the US still lags behind Europe, Japan, and other countries in recognizing the growing commercial importance of space. Though Europe has scaled back its space budget a bit, Dr. Glaser cites a recent European commitment to spend $14 billion on new space projects and a Japanese pledge to spend $40 billion on space within 15 years, compared with the stop, start, and cut approach to NASA funding.

``Slowly, people are realizing the question we must resolve is whether the US is going to be No. 2, No. 3, or No. 4 in space,'' Glaser says. ``The danger of slipping to fourth place would have some tremendous economic effects, not immediately, but in the long run.''

Congress and the President support the space station program, he says, yet ``the problem is that in the space game all these other countries talk about 12-15-20-year program plans and then commit funds to them. They have the advantage of experience and data. If you outspend your competition by a factor of 3 to 5, obviously you will be ahead technically.''

A good example of the stutter-step approach to space budgeting has come in the wake of the 508-point stock market drop Oct. 19. The $76 billion, two-year budget cut means NASA's share of the cuts could total 3.5 percent of a lean $9.3 billion budget, says David Dickerson, an aide for the House Subcommittee on Science, Space, and Technology.

Such a cut could mean a space station project receiving just 50 percent of the $767 million currently appropriated for the first year of the project, Mr. Dickerson says. Costs for the first phase of the program are put at $13.6 billion, but some experts put total costs at more than $20 billion by the mid-1990s.

``We know for sure the cuts [to NASA] are going to be substantial,'' Dickerson says. ``It is likely that deployment of the station will be delayed'' from the 1994 target date. Despite the cuts, aerospace companies like McDonnel Douglas and Boeing are glad to go after even these relatively small contracts since defense spending seems likely to be cut back in coming years.

Budget realities have also brought back to earth en trepreneurial dreams of colonies on the moon, factories in space, and multiple manned stations in orbit. Serious space entrepreneurs seem grateful.

``There was a lot of hype that was building up three or four years ago,'' says Charles Bugg, director of the center of macromolecular crystallography at the University of Alabama, Birmingham. ``It's been a chance to sit back and take a hard-nosed look at reality, and gain a more real perception of how space can be used.''

Also indicating a warming of business toward space research is Lawrence Herbolsheimer, deputy to Mr. Rose in NASA's Office of Commercial Programs. ``After the shuttle accident, people's spirits couldn't have been lower,'' Mr. Herbolsheimer says. Now there is ``feverish activity,'' he says, and an upbeat mood. Two recent conferences in Nashville and in Houston were attended by hundreds of companies.

Herbolsheimer points to 16 industry, government, and academic consortiums, spawned by NASA money, continuing to work on space-related projects and experiments. Dr. Bugg's work is with one such consortium.

John Glaab, manager of NASA's small business and innovation research program, says Congress and the President have recognized the need for small businesses, inventors, and entrepreneurs to become interested in space experimentation. It is these small fry, not the big corporations, who are most likely to risk development of innovative products and processes.

``We know a lot of these people are inexperienced, and we do everything we can to help them along,'' Mr. Glaab says of the 20,000 solicitations received by his office last year. NASA saw potential merit in 2,000 of those, says Glaab, and sent those back with suggestions. Ultimately, 206 proposals were accepted and sponsors given $50,000 and six months to come up with a project.

Dr. Bugg at the University of Alabama has developed an experiment using space to grow high-quality protein crystals. It will fly on the next shuttle. But others won't be as fortunate, he says, pointing up problems with the system of getting business research projects into space.

Ultimately, about 50 percent of the Phase 1 candidates receive further funding, and permission to fly their experiments. Then they must wait for space aboard the shuttle to become available. Some experiments attract the interest of venture capitalists, others simply run out of time, patience, and funds. One of the biggest hurdles to doing business in space is having the time and patience to get through bureaucratic red tape at NASA.

``With the backlog, it is going to be difficult to get a flight opportunity in the next two years,'' Glaab says.

The shortage of space for experiments comes back to Space Industries Inc., the ISF, and Allen - who knows an industrial park in space is something of a long shot.

Allen, however, is smiling more confidently because two big companies with deep pockets - Westinghouse, and more recently Boeing - have joined with Space Industries. All three companies are banking on the hunch that American business will soon be demanding a place in orbit for private research experiments.

``There is substantial momentum building as a result of NASA's reemphasis on commercial space development,'' says Brad Meslin, a consultant with CSP Associates Inc., a Cambridge firm. ``There are a lot of uncertainties, but a year ago there was just not the level of support there is today.''