Please ensure Javascript is enabled for purposes of website accessibility

Orbital Sciences Sticks a Russian Engine in Its New Rocket -- Is This a Win for SpaceX?

By Rich Smith - Dec 27, 2014 at 9:35AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The beleaguered space tech company replaces one troublesome Russian rocket engine with... another?

Two months ago, an Orbital Sciences (OA) rocket launch to resupply the International Space Station ended with a fireball lighting up the skies over Wallops Island, Virginia.


Fireball over Wallops. Source: Wikimedia Commons.

The explosion spread wreckage over nearly half the island. It cost NASA a payload of supplies, cost Orbital Sciences credibility with investors, and improved rival SpaceX's chances of winning future NASA supply contracts.

But Orbital promised quick action, outlining last month a "go forward" plan consisting of:

  • "one or two non-Antares launches of the company's Cygnus cargo spacecraft to the ISS in 2015-2016,"
  • "early introduction of its previously selected Antares propulsion system upgrade in 2016," and
  • "repairs to the Mid-Atlantic Regional Spaceport (MARS) launch complex at NASA's Wallops Flight Facility."

One year from now, Orbital Sciences should have a new engine for its Antares rockets. The question is: Whose rocket will it be?

Questions answered
Or rather, that was the question. Two weeks ago, Orbital confirmed it had picked the new replacement engine for Antares. And last week, we learned who the lucky winner is: Russia.

In the short term, Orbital Sciences will contract with rivals at the United Launch Alliance, or ULA, to send its next one or two ISS supply missions into orbit atop Lockheed Martin (LMT 1.07%) Atlas V rockets. (Lockheed owns one half of the ULA joint venture. Boeing (BA 2.23%) owns the other.) The first Cygnus cargo capsule is scheduled to go up in the fourth quarter of 2015. A second launch might go up on an Atlas V in 2016.

Or not. Orbital plans to have Antares ready in time to make three ISS supply runs in 2016, launching in the first, second, and fourth quarters. What's more, Orbital said "the upgraded Antares will permit Cygnus spacecraft on each of these missions to deliver over 20% more cargo than in prior plans."

This is because, as now confirmed by Russia's Izvestia, Orbital has agreed to pay at least $1 billion for 20 to 60 new RD-181 rocket engines from Russian manufacturer Energomash.

Heading back to the Russian well
Derived from the RD-191 "Angara" engine, the kerosene/liquid oxygen-fueled RD-181 puts out 432,000 foot-pounds of thrust at sea level. Two engines power each rocket, which combined makes for 28% more thrust than a pair of NK-33/AJ-26 engines -- the type Orbital used in its October launch -- produce. This tallies with Orbital's promise of the ability to lift "over 20% more cargo."


An RD-191 engine. Source: Wikimedia Commons.

What it means to investors
Here at The Motley Fool, we love reading about cutting-edge space tech -- but what we really enjoy is translating defense news into cold, hard profits in our portfolios. With that end in mind, let's take a quick look at what this news could mean for defense investors.

The RD-181 might prove to be safer than Orbital's old NK-33s. It is built at the same Russian factory that builds ULA's preferred RD-180 engines, for one thing, and (a reduced-strength version of) it has been successfully used by South Korea's space program, for another. Orbital Sciences Executive Vice President Ron Grabe says it's got the best combination of any rocket of "availability, technical performance and cost" for use on Antares. 

Grabe also confirmed that the RD-181 won't be subject to the congressional ban on use of Russian RD-180 rocket engines in national security space launches, noting: "Our application is in civil space. There's a long history of U.S.-Russian cooperation in civil space."

That's reassuring. Orbital rival ULA, for example, has cited Congressional moves to ban use of the Russian RD-180 rocket engine in national security space launches as having the potential to lock it out of this important market, and give SpaceX a de facto monopoly. If Orbital can dodge that bullet in the civilian market, maybe its shareholders can breathe easy.

But even so, ULA has responded to Congress's threat by promising to build a made-in-America engine for its rockets going forward. And SpaceX already builds its engines here. Given the choices, when NASA is handing out contract awards for future missions, Orbital Sciences may increasingly look like the odd man out.


SpaceX's most recent launch -- the AsiaSat 6, sent into orbit aboard a Falcon 9 rocket on Sept. 8. Phot source: SpaceX.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Boeing Company Stock Quote
The Boeing Company
BA
$122.06 (2.23%) $2.66
Lockheed Martin Corporation Stock Quote
Lockheed Martin Corporation
LMT
$447.54 (1.07%) $4.76
Orbital ATK, Inc. Stock Quote
Orbital ATK, Inc.
OA

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.