% I 7 '“ kg’ 7 7 l7af4i2‘A7’ 87-477 SPR CRS REPORT FOR CONGRESS PRIVATIZATION OF THE LANDSAT REMOTE SENSING SATELLITE SYSTEM: CURRENT ISSUES G0Vemment Publications A Unit AUG 7 7 1994 Washington Umversity Libraries St.» Louis, MO 63130 Marcia S. Smith W,v§¢%_»g g"g2%$,f”*fT?f; Specialist in Aerospace Policy ;”aM_J‘}£¢xwfi; %+u;:amn¢a Science Po1icy_Research Division . . - " Ira. 'r 3 I I X W?¢f « 3: ¢ 14 :4 xv ; ;~ .:.=I V C‘ V ~ ‘- y ;- L; .5-_'. '.;;, k V’ 4’ I /at .‘. J‘ A—l’A W, _ ;_ F" 1 IA ll" : " 7-: . ii I J 3}” I; Q “’ r. V V , ,.. I p ' -5 k ( / “ - - June 5, 1987 n versitr of Missouri olumbla ‘H mm: mm mm O10-103940513 - umfli llll The Congressional Research Service works exclusively for- the Congress, conducting research, analyzing legislation, and providing information at the request of committees, Mem- bers, and their staffs. The Service makes such research available, without parti- san bias, in many forms including studies, reports, compila- tions, digests, and background briefings, Upon request, CRS assists committees in analyzing legislative proposals and issues, and in assessing the possible effects of these proposals and their alternatives. The Service’s senior specialists and subject analysts are also available for personal consultations in their respectivefields of expertise. Attempts to transfer satellite system from the complicated by the Reagan subsidies for the company Landsat privatization are of the Landsat system. ABSTRACT operations of the Landsat land remote sensing Government to the private sector have been Administration's decision to withdraw promised The issues involved in chosen to operate the system. complex, and their resolution will determine the fate SUMMARY Developed by the National Aeronautics and Space Administration (NASA), the Landsat land remote sensing satellite system produces data that are used for crop forecasting, land use planning, mineral exploration, and many other purposes. Operation of the system was transferred to the National Oceanic and Atmospheric Administration (NOAA) in 1979 as the first step in turning it over to the private sector as the market for the data matured. The Reagan Administration decided to accelerate the privatization process, and in 1984 Congress passed the Land Remote Sensing Comercialization Act to facilitate the transfer. In 1985, a company named EOSAT was selected to assume responsibility for Landsat in return for a Government subsidy of $250 million over five years. For FY85 and FY86, $99 million of that subsidy was appropriated for EOSAT, but in the FY87 budget cycle, the Administration failed to request funding to support the contract. Congress restored some of the funding and directed NOAA to find the rest from its other activities. Release of the money was contingent upon NOAA submitting a new privatization plan for congressional approval. The NOAA plan was submitted in December 1986, but rejected by Congress because it failed to provide a plan for successful privatization of the system. The argument was based on whether one or two satellites would be needed to assure potential users of data continuity: Congress insisted that two satellites were needed, while the Administration (which has previously agreed that two were required) asserted that one would be sufficient. CRS-2 The debate over Landsat today focuses on the FY87 Supplemental Appropriations Bill and the FY88 funding bills for NCAA. The issues include: how important is the Landsat system to the United States both in terms of the data it provides and the role it plays in maintaining U.S. competitiveness in this area of technology; if the system is important to the United States, what Government agency or agencies should bear the costs of supporting the system; how'many new spacecraft are needed to assure data continuity and therefore help develop a commercial market for the data; and generally, should the Government live up to its contractual commitments. The resolution of these issues will affect the fate of the Landsat system. CRS-3 PRIVATIZATION OF THE LANDSAT LAND REMOTE SENSING SATELLITE SYSTEM: CURRENT ISSUES The National Aeronautics and Space Administration (NASA) launched the first land remote sensing satellite, Landsat 1 in 1972.1 Since then, four more Landsat spacecraft have been launched, and two are still operating (Landsat 4 and 5). Landsat data are used for purposes such as crop forecasting, mineral exploration, pollution monitoring, and land use planning. Users include Government agencies (especially the Departments of Defense, State, Agriculture and Interior) and the private sector. Operation of the Landsat system was turned over to the National Oceanic and Atmospheric Administration (NOAA, part of the Department of Commerce) by President Carter in 1979. The Carter Administration expected the private sector ultimately to assume responsibility for operating the system once the commercial market for the data developed, but that was anticipated to take as long as a decade. The Reagan Administration chose to accelerate that process, and in 1984 Congress passed the Land Remote Sensing Commercialization Act (P.L. 98-365) to facilitate transfer of operational responsibility to the private sector. Through a competitive bidding procedure, the Reagan Administration selected a company called EOSAT to operate the Landsat system in 1985. EOSAT is a joint venture between Hughes Aircraft (now part of General Motors) and RCA 1 Originally, Landsat was called the Earth Resources Technology Satellite (ERTS) program, and the first satellite was designated ERTS-1. It was renamed Landsat 1 after the program name was changed. CRS-4 (now part of General Electric). EOSAT agreed to assume responsibility for‘ .marketing and distributing existing Landsat data, operating Landsat 4 and 5, and building two new spacecrafts (Landsat 6 and 7). In return, the Government agreed to provide $250 million over five years as a subsidy to assist in the privatization of Landsat since the market was considered immature. At the time, both sides agreed that two more satellites were required to assure potential users of data continuity. In addition to the $250 million for EOSAT, the Government agreed to pay launch costs for the two new satellites. Originally planned for launch on the space shuttle, these costs were estimated by NASA at $45 million, for a total Government commitment to the Landsat system of $295 million. For FY85 and FY86, Congress appropriated a total of $125 million to NOAA: $90 million for EOSAT and $35 million for NASA. In the wake of the Challenger tragedy which grounded the shuttle system, NOAA decided to use Air Force Titan II launch vehicles instead of the shuttle. The $35 million given to NASA for the shuttle launches has been "refunded" to NOAA and assigned to non-Landsat programs. The Air Force estimates that it will cost $70 million for two Titan II launches. The current debate over the future of Landsat began during the FY87 budget cycle when the Administration failed to request funding to support the EOSAT contract. According to the contract, $69.5 million would have been provided in FY87. Congress restored $27.5 million to the NOAA budget for Landsat in the FY87 Continuing Appropriation Act, P.L. 99-500, and directed NOAA to find the rest of the funding from its other programs. Release of the FY87 funding, however, was contingent upon NOAA submitting a new Landsat privatization plan for congressional approval. CRS-5 The new NOAA plan was received by Congress in December 1986, but it called for only one more satellite instead of two, for a total cost to the Government of $259 million ($209 million for the satellite, plus $50 million for one Titan II launch--the cost quoted by the Air Force at that time.) Congress rejected the plan because it felt that a commitment to only one more spacecraft was insufficient to provide the required confidence in the system to attract data users, and therefore would not lead to a successful privatization effort.2 Hence, the FY87 funding has not been released. EOSAT began laying off employees in December 1986 and has ceased its market development activities as well as spacecraft design.3 The House version of the FY87 Supplemental Appropriation Bill (H.R. 1827, passed by the House on April 23) makes $62.5 million of previously appropriated funds available for Landsat: the $27.5 million provided in P.L. 99-500, plus $35 million from NOAA's polar orbiting satellite program. The language stipulates that there should be two more satellites, but that NOAA will pay for only the first. Who will pay for the second is not specified. The Senate version of the bill (passed June 2) does not include Landsat language. Instead, Senator Domenici sponsored an amendment that passed on May 28 deferring NOAA's use of the $27.5 million appropriated in P.L. 99-500 and. applying it to housing for the homeless.4 A staff member from the Senate Appropriations Committee explained that this was not an action taken against Landsat, but rather an indication that the Senate did not believe the Administration would submit a privatization plan which would meet congressional 2 Congress Denies Landsat Commercialization Plan, Jeopardizing Landsat 4 and 5. Space Commerce Bulletin, Feb. 13, 1987. p. 5-6. 3 Ibid. 4 Congressional Record, May 28, 1987, p. S 7255-9. CRS-6 approval in the near future. Hence, they considered it unlikely that the $27.5 million would be released for Landsat's use and could be applied to other activities. Should the Administration submit a plan with which Congress concurs, the matter could be reconsidered during conference.5 The Landsat debate will not end with resolution of the FY87 issues. The FY88 NOAA budget request includes funding for the plan rejected by Congress, and the controversy over how much of a subsidy the Government should provide to EOSAT, how many satellites are needed, and whether the Government should live up to its contractual obligations, are issues in the FY88 budget cycle. Congressman McCurdy succeeded in adding $70 million to the FY88/FY89 Department of Defense Authorization bill (H.R. 1748, passed by the House on May 20) for Landsat. Although the use of the money is not specified, the Air Force has estimated that two Landsat launches would cost $70 million. The subsidy issue became more complicated in 1986 as estimated costs for EOSAT increased from $250 million to $297 million. Schedule delays because of the shuttle tragedy are probably part of the reason for the cost increase, but there was another change made in 1986 that may also contribute to the cost increase. Several weeks after the Challenger tragedy, EOSAT and NCAA agreed to a contract modification that allowed EOSAT to use an OMNISTAR design for the Landsats instead of the TIROS design originally planned. TIROS has been used for NOAA weather satellites in the past, while OMNISTAR is a new concept 7 involving a platform onto which several different sensors can be placed. Space shuttle crews would be able to change the sensors or repair the platform, 5 On June 2, 1987, the Office of Management and Budget submitted a new plan to the House Committee on Science, Space, and Technology. According to committee staff, the proposal still calls for only one more satellite, with a study of the need for a second. Congress has not formally acted on this new proposal yet. CRS-7 presumably making this concept more cost effective in the long run, but also making it shuttle-dependent.6 Why NOAA and EOSAT decided to move to a shuttle- dependent design weeks after the Challenger tragedy is not clear. Perhaps they did not realize how long the shuttle would be grounded. They also apparently did not anticipate the growing debate over whether to launch the space shuttle from Vandenberg Air Force Base (VAFB), California, the site from which U.S. polar orbit launches take place.7 In the aftermath of Challenger, the Air Force is reconsidering the utility of launching the shuttle from Vandenberg, and the shuttle launch facility there has been mothballed. The earliest a shuttle could be launched at VAFB is now estimated as 1992. Since the two existing Landsats are already at the end of their design lifetime, the next satellite in the series will have to be launched as soon as possible--certainly before 1992 if data continuity is to be maintained. Consequently, the OMNISTAR design cannot realistically be used. Hence the preliminary decision to return to the TIROS design as originally planned in 1985. As noted earlier, however, the costs for those two satellites has increased by $47 million. EOSAT agreed to pay all costs associated with the change to the OMNISTAR design, so that increased estimate should not include OMNISTAR charges. EOSAT has not provided a breakdown of the $47 million, however, and NOAA stresses that the costs have not been negotiated yet. 9 A spacecraft using the OMNISTAR design could be launched on a Titan IV launch vehicle instead of the shuttle. The first Titan IV should be available in 1988, but the Air Force is expected to require all the Titan IVs that will be produced through the early 1990s, so it is unlikely that one could be made available for Landsat. Also, the OMNISTAR platform can only be serviced by the shuttle, so launching on Titan IV would not solve the basic problem. 7 Landsat and other satellites intended to observe the entire globe are placed in "polar" orbits that circle the Earth's poles. For safety reasons, these launches take place from Vandenberg where the path of the launch vehicle is over the ocean rather than land. CRS-8 Another complicating factor in the Landsat debate is foreign competitiveness. The French already have in operation their own land remote sensing satellite, SPOT. They have established a commercial marketing group called SPOT-Image which is successfully competing with EOSAT. The Soviet Union has land remote sensing satellite systems (some are individual satellites, but the major Soviet remote sensing instruments are on their space station), and they have announced plans to market the data around the world. The Japanese and the European Space Agency8 are each planning their own land remote sensing satellite systems. Thus, there is some concern that if the United States does not help EOSAT privatize the Landsat system, we will lose the lead in a technology that we pioneered. The issues surrounding Landsat are complex, and were aired during hearings before two subcommittees of the House Committee on Science, Space, and Technology on March 31 and April 2, 1987. The consensus of the Government, academic and private sector witnesses was that the United States needs the Landsat system both because the data are required for national security and other purposes, and to maintain competitiveness in this area of technology. The unresolved question was how to pay for it. The Office of Management and Budget is working with the various Government agencies involved to determine how best to provide for the future of the Landsat system. In summary, the questions involved in the Landsat debate include the following: 1. Is the Landsat system important to the United States both in terms of the data it provides and the role it plays in maintaining U.S. competitiveness? 8 The European Space Agency is a group of 13 European countries: Austria, Belgium, Britain, Denmark, France, Federal Republic of Germany, Ireland, Italy, the Netherlands, Norway, Spain, Sweden, and Switzerland. CRS-9 2. If it is, how much of a subsidy should the Government provide to help transfer operation of the system to the private sector? Should the Government simply accept responsibility for operating the system itself as it did in the past? 3. Should the Government be forced to live up to its contractual responsibility to EOSAT in any case? 4. If the Government is going to pay for the system, in whole or in part, what agency or agencies should bear the cost? 5. If successful privatization of the system is the goal, are one or two more satellites required? 6. If two satellites are required, should the second be the same as the first, or should it incorporate new technology? As the Administration and Congress debate these issues, the future of IEOSAT remains in doubt, since it still does not have the promised FY87 funding. If the debate is not resolved soon, the Government may find itself without the option of relying on EOSAT to privatize the system with Government support. CRS-10 SUMMARY OF LANDSAT PRIVATIZATION PLANS AND COST ESTIMATES (cost in $ million) Number of Launch EOSAT* Launch* Plan Satellites Design Vehicle Qgggg Costs Total 1985 Contract 2 Tiros Shuttle $250 $45 $295 1986 Modified Contract 2 Omnistar Shuttle $250 $45 $295 1986 Revised Dept. of Commerce 1 Tires Titan II $209 $50 $259 1987 EOSAT A 2 Tiros Tital II $297 $70 $367 *EOSAT costs are those the Government would pay to EOSAT as a subsidy. Launch costs are to be paid directly by the Government. fl %4‘L';éfiK4Bv QF. ,_j WASHINGTGN; UNWEREBHTY .. ST. .Lou:s .— M0.