Orbital presses U.S. lawmakers to end ban on retired missiles

CAPE CANAVERAL, Fla. (Reuters) - Orbital ATK is pressing U.S. lawmakers to end a 20-year ban on using decommissioned intercontinental ballistic missiles (ICBM) for launching commercial satellites and the effort has raised concern among companies that have invested millions of dollars in potential rival rockets.

A modified Minuteman intercontinental ballistic missile (ICBM) is shown during a test involving a planned intercept of an intercontinental ballistic missile target launched from Vandenberg AFB, California in this July 14, 2001 file photo. REUTERS/Ballistic Missile Defense Organization/Handout via Reuters

Orbital Vice President Barron Beneski said in an interview on Friday that the company was pushing Washington to get the ban lifted as part of the National Defense Authorization Act that sets defense policy for fiscal 2017, which begins Oct. 1.

The missiles were idled by nuclear disarmament treaties between the United States and Russia in the 1990s.

Virgin Galactic and other space startups said in interviews last week they worry that lifting the ban would give Orbital an unfair competitive advantage if it was allowed to use surplus government rocket motors in its commercial launch vehicles.

The issue could affect hundreds of millions of dollars in potential rocket launch orders in coming years.

Orbital’s initiative dovetails with an Air Force plan to cut the amount of money it spends on missile storage and support services to $6.5 million in fiscal year 2017 from $17 million this year.

The Air Force had no immediate comment on the budget cut proposal and its intentions for the stockpiled missiles.

U.S. policy allows the missile rocket motors to be used to launch military payloads, a service that Orbital has already been providing under contract with the Air Force. But the decommissioned missiles cannot currently be used as launch vehicles to fly commercial satellites.

Orbital said it wants the missiles to build a Minotaur 4 launch vehicle capable of lifting about four times the weight of small rockets like LauncherOne, which is being developed by Richard Branson’s California-based Virgin Galactic.

“It’s not a matter of us taking business away from them. It’s a matter of us filling a void in the Minotaur 4 market and competing it internationally,” Orbital’s vice president of business development Mark Pieczynski said.

Beneski said the company would welcome continued Department of Defense review “to make sure we’re not buying assets and then cannibalizing the commercial market.”

They said Orbital was not looking for an exclusive deal, and would pay a “fair market rate” for the retired missiles.

Virgin Galactic Vice President Richard DalBello said on Friday that his company did not expect a large commercial market in the class of the Minotaur. “What they will be doing is selling rides to smaller commercial payloads, and aggregating them, so they will be directly competing with us,” he said.

Virgin is among a handful of startups that include Texas-based Firefly Space Systems and Rocket Lab of Los Angeles and New Zealand, which have invested hundreds of millions of dollars in developing rockets (lower case) to carry small satellites into orbit.

“It’s a dangerous precedent when the government tries to inject itself in the commercial marketplace. It can be disruptive, and not for the right reasons,” Eric Stallmer, president of the Commercial Spaceflight Federation, a Washington DC-based trade organization, said in an interview on Thursday.

Reporting by Irene Klotz; editing by Andrea Shalal and Joe White