Will Russia Ban RD-180 Rocket Sales to America?
Mother Russia is starting to look extremely fickle.
For months now (as you've no doubt heard), Russian Deputy Prime Minister Dmitry Rogozin has been threatening a whole host of sanctions against the U.S. space program. Supposedly, unless the U.S. backs down on the sanctions it imposed on Russia over the Crimea invasion, Moscow is prepared to turn off American GPS ground stations in Russia, deny American astronauts rides to the International Space Station aboard Russian rockets, and forbid the sale of RD-180 heavy rocket engines to Boeing and Lockheed Martin's United Launch Alliance if said rockets would carry any U.S. military satellites into orbit.
That last one that really got the U.S. government's attention -- and as we learned just this past week, it's been making some waves in Russia as well.
The U.S. today has no homegrown rocket engine of size and strength equivalent to Russia's RD-180, which is needed to lift extremely heavy military satellite packages into orbit aboard ULA's Atlas V launch vehicles. (Lockheed Martin's Delta IV rocket can still do the job, and is powered by GenCorp's Rocketdyne RS-68 engine, but it's significantly more expensive than an RD-180-powered Atlas V. Conversely, other rockets in our arsenal are simply too small to do the job).
As a result, Russia's threat to cut off access to ULA's supply of RD-180s put the U.S. government in something of a pickle.
Faced with twin threats from a SpaceX lawsuit that had the incidental effect of temporarily banning U.S. purchases of RD-180s on the one hand, and Russia's threat to ban sales of the rocket engine on the other, ULA made the logical move of accelerating deliveries of RD-180 engines under its existing supply contract with the joint venture between Russia's Energomash and America's United Technologies , which supplies the engines.
As ULA explained: "Five engines were due to be delivered in November, but now two will arrive in August and the remaining three in November. The plan had been for six engines per year after that, but instead Energomash will deliver eight per year. That means the contract will be fulfilled a year" ahead of schedule.
From ULA's perspective, the aim of this move is clear. ULA wants to get hold of all the RD-180s it possibly can, as fast as it possibly can, before someone shuts off the spigot. But over in Russia, they're putting an entirely different spin on the news.
Lost in translation
As reported on Russian state news outlet RIA Novosti last week, Rogozin is now boasting that that the Americans "have come to their senses" after suffering the "impact of sanctions" from Russia. Making no mention of his earlier threat to forbid sale of RD-180s to ULA, the Deputy PM informed RIA that "the Americans ... are now ready to buy even more engines from us."
The implication of Rogozin's statement, and his use of the phrase "ready to buy" rather than, say, "asking to buy," is that Russia is itself ready and willing to sell the U.S. as many RD-180s as it wants. In short, the threat of forbidding these sales seems to have vanished.
Needless to say, this is a pretty dramatic reversal of tone (that is, unless Rogozin changes his mind again). It suggests a significant walk-back in tensions, and an eagerness by Russia to dissuade ULA from developing an RD-180 alternative that, as RIA hastens to point out, "could cost the U.S. $1.5 billion and take up to six years" to develop. But what does it mean to you and me?
What it means to investors
In short, it means that Lockheed Martin has been given an "out." The company is supposedly already deep in negotiations with "multiple" U.S. rocket tech companies to develop an RD-180 replacement for ULA. (I've laid out the leading candidates for you here.) But if Lockheed decides to stick with its Russian supplier, then all bets may be off.
Already, the Obama administration has objected to Congress allocating $220 million in funding for Lockheed's replacement engine project. If forced to shoulder the entire cost of developing an RD-180 alternative, Lockheed Martin may very well decide that sticking with the RD-180 is its best option.
In short, right now, the rocket engine situation is very much up in the air (so to speak). If Lockheed takes Russia's bait there's no money for GenCorp or any of the other companies that stepped up to offer alternatives to the RD-180. On the other hand, if Lockheed Martin plays its cards right, it just might be able to accumulate a big enough supply of RD-180s to keep American rockets flying until an alternative is developed.
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The article Will Russia Ban RD-180 Rocket Sales to America? originally appeared on Fool.com.Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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