Is Russia Preventing the U.S. From Traveling To the International Space Station? America's Latest Proposal

Boeing and Lockheed Martin move quickly to replace the Russian RD-180 rocket engine.

Jun 22, 2014 at 10:31AM

The International Space Station. Soon to be off-limits to the United States? Photo: Wikimedia Commons.

Look! Up in the sky! Is it a bird? Is it a plane?

No, it's an International Space Station. But if Russia gets its way, it's going to be off-limits to the United States soon.

For weeks now, there have been rumblings about Russia wanting to ban the United States from using the ISS while the two countries wrangled over Ukraine. While that would probably violate international law, it may be feasible from a practical perspective. Russian Deputy Prime Minister Dmitry Rogozin argued that "the Russian segment [of the ISS] can exist independently from the American one. The U.S. one cannot."

Since the United States terminated its space shuttle program, we've depended on Russian rockets to carry U.S. astronauts to the ISS. NASA has a contract to continue these flights through 2016 -- at $70 million a pop. After that, Russia would be within its rights to deny U.S. astronauts seats on Soyuz rockets. If America wants to send astronauts up after the contract expires, joked Rogozin: "I propose that the United States delivers its astronauts to the ISS with the help of a trampoline."

It never just rains, it pours (even in space)
An even more immediate problem facing America is Russia's threat to cut off access to the RD-180 rocket engines that the United Launch Alliance (the joint venture between Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT)) uses in its Atlas V rockets. These are the big beasts that carry U.S. military satellites into space. They're critical to national security. But we've only got enough RD-180s stockpiled to keep ULA supplied for about another 22 months.


This ULA Atlas V rocket is powerful -- but it won't travel far without an engine. Photo: NASA.

What's to be done?
Just two weeks ago, we told you about U.S. Air Force plans to set up a public-private partnership to develop a new rocket engine capable of replacing the RD-180. In an uncharacteristic exhibition of rapid problem-tackling, ULA is already rushing to get the project under way.

On Monday, ULA confirmed that it has signed contracts with "multiple" American rocket companies to begin working up "next-generation liquid oxygen/hydrocarbon first stage propulsion concepts" that could replace the RD-180 (the RD-180 uses liquid oxygen and kerosene as its fuel sources).

Working at a breakneck pace, ULA said it expects to select a new design before the end of this year. Then, pushing the envelope on the usual five- to eight-year timeline usually needed to develop such engines, ULA said it will have a new rocket ready to fly by 2019. (In the meantime, ULA will try to string Russia's Energomash along, negotiating to keep the RD-180s coming until they're no longer needed.)

What does it mean to investors?
It's hard to overestimate how important this news is to investors. Development of a new rocket engine, and probably a new launch vehicle to carry it, could bring the ULA contract's winner billions of dollars in development work alone -- followed by more billions in revenue as dozens of the new engines are put to work in years to come.

While ULA has not yet revealed the names of the companies that it has signed contracts with, the likely contenders remain Alliant Techsystems (NYSE:ATK) and Orbital Sciences (NYSE:OA) -- soon to team up in a new entity to be known as Orbital ATK -- and also GenCorp (NYSE:AJRD), which is now home to the rocket science juggernaut Aerojet Rocketdyne.

Of the two, I believe GenCorp must be considered the front-runner. The company has already invested $300 million in developing a new liquid oxygen/kerosene rocket engine called the AR-1, that when finished could lift rockets as big as what Russia's RD-180 lifts. What's more, GenCorp says it is only four years away from completing the engine -- giving it perhaps a one-year head start over its rivals, and raising the possibility that ULA could get this work done by 2018.

As an added bonus, GenCorp says that a pair of its AR-1 engines could cost as little as $25 million total -- or even as little as $20 million -- making them cheaper than the Russian rocket engine they'd replace.

Your Foolish takeaway
Cheaper rockets, delivered ahead of schedule, and not dependent on a hostile foreign government to supply them? That sounds like a winning combination for GenCorp.

Russia doesn't scare Warren Buffett. This does.
Warren Buffett just called this emerging technology a "real threat" to his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. It won't be long before everyone on Wall Street wises up, that's why The Motley Fool is releasing this timely investor alert. Click here to learn more about what's keeping Buffett up at night and the one public company we're calling the "brains behind" the technology.

AR-1 isn't the only iron GenCorp has in the fire. Check out this photo of its work on the new J-2X. Photo: Wikimedia Commons.

Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Orbital Sciences. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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