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Silicon Valley's Rocket Man

Friday, 26 Feb 2010 | 3:48 PM ET
Earth and Moon
Rob Atkins | Photographer's Choice RF | Getty Images
Earth and Moon

Many in Congress and the aerospace industry think NASA is engaging in funny business when it comes to the future of space.

The space agency this week is taking a lot of heat for farming out a lot of post-Shuttle work to smaller commercial contractors, so that NASA can focus on Mars.

"I was against privatization in the Bush administration," Rep. David Wu of Oregon is quoted in the New York Times. "I am against privatization in the Obama administration."

Hoping to prove the skeptics wrong is Elon Musk, CEO and CTO of Space Exploration Technologies, or SpaceX. "It's the right thing to do, but it's a tough one," Musk told me earlier this week at the company's Southern California headquarters.

SpaceX is located in a massive hangar once dedicated to building 747s. It's presence, while drawing the ire of some traditional players, also brings back an enterprising spirit to the birthplace of aerospace manufacturing.

Musk made his fortune creating and selling PayPal, plowing those profits into two companies, SpaceX, and Tesla Motors.

Elon Musk, SpaceX
Discussing the privatization of the space program, and the push for companies, like SpaceX, to succeed, with Elon Musk, CEO and CTO of Space Exploration Technologies, or SpaceX.

He says SpaceX, which received more than $200 million in NASA seed money, has been profitable for the last three years. It's landed 30 contracts for launches, "half of those are NASA and the other half are non-NASA." One of those NASA contracts is worth $1.6 billion to develop a rocket and capsule to ferry cargo to the International Space Station over 12 trips. The contract could nearly double if SpaceX is eventually able to take astronauts. The firm's smaller Falcon 1 rocket has successfully launched a satellite into space (after a few failures), and now the larger Falcon 9—destined for NASA—sits on a launchpad at Cape Canaveral preparing for a "wet dress rehearsal" (loading and unloading fuel).

The rocket will have its first test launch probably by May, though Musk hesitates to commit himself to deadlines.

Here are parts of my interview with Musk, who is almost as surprised as anyone that the Obama administration is giving him a shot.

In the interview, Elon Musk talks about the pressure he's under for SpaceX to succeed.

Musk claims that SpaceX can increase reliability over the shuttle by 900 percent, while cutting costs 90 percent.

Elon Musk on Saving Costs
How using private sector companies for space exploration can save the government significant money, with Elon Musk, CEO and CTO of Space Exploration Technologies, or SpaceX.

He says the average shuttle flight costs $1 billion (if you divide the shuttle's $4.5 billion annual budget by four or five flights).

His cargo trips will cost "only" $100 million. Shuttling astronauts will cost perhaps as much as $140 million, the extra cost mostly due to a special escape mechanism. Listen to how Musk explained the reduction in cost.

Elon Musk on Safety
Keeping America's space program safe while cutting costs, with Elon Musk, PayPal founder & CEO/CTO of Space Exploration Technologies, or SpaceX.

What proof do we have that a new, untested player like SpaceX will be able to build a safer spacecraft?

Listen to the explanation Musk gave me.

Musk built SpaceX from the ground up.

Musk on Space & Entrepreneurship
Bringing the Silicon Valley culture to America's space program, with Elon Musk, PayPal founder & CEO/CTO of Space Exploration Technologies, or SpaceX.

Eighty percent of what they use, they make themselves.

And he's brought an entirely new culture to aerospace, one he learned in Silicon Valley. He tells us why he sees that as a positive.

Musk as Astronaut?
The desire (or lack of desire) to go into space as a passenger, with Elon Musk, PayPal founder & CEO/CTO of Space Exploration Technologies, or SpaceX.

Finally, unlike Richard Branson, who is developing space tourism and plans to be the first passenger on his Virgin Galactic spacecraft, Elon Musk says SpaceX is not about getting himself into space.

At least not yet. Listen to what he has to say.

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  • Based in Los Angeles, Jane Wells is a CNBC business news reporter and also writes the Funny Business blog for CNBC.com.

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