To date, the commercial space launch industry has primarily focused on putting payloads, such as satellites, into orbit, using launch vehicles that are used only once. The number of launches for this purpose has, however, dropped off, and the industry appears to be increasing its focus on space tourism. Apart from the five manned flights in 2004, efforts thus far have consisted of tests for research and development purposes, but companies are continuing to develop vehicles for manned flights. Concurrently, companies and states are developing additional spaceports to accommodate anticipated commercial space tourism flights, with states providing economic incentives for development. As part of FAA’s mission to promote the commercial space industry, federal funds have also supported infrastructure development at one spaceport. There are three main types of space launches—national security, civil, and commercial. National security launches are by the Department of Defense for defense purposes, and civil launches are by NASA for scientific and exploratory purposes. Commercial launch companies compete domestically and internationally for contracts to carry payloads, such as satellites, into orbit using expendable launch vehicles, which are unmanned, single-use vehicles. Except for the launches of SpaceShipOne in 2004, U.S. commercial space launches have been unmanned. Designed to carry crew and one passenger, SpaceShipOne was the first commercial reusable launch vehicle mission licensed by FAA. After reaching a peak of 22 launches in 1998 (see fig. 1), the number of commercial space launches began to fluctuate and generally decline following a downturn in the telecommunications services industry, which was the primary customer of the commercial space launch industry. In the last several years, two trends have emerged. First, there has been a drop- off in U.S. commercial orbital launches. In part, this may be because the U.S. commercial space launch industry is not price competitive with foreign companies, some of which receive extensive government support, according to Department of Commerce officials. Second, FAA began issuing experimental permits in 2006 to companies seeking to conduct test launches of reusable launch vehicles. According to industry experts that we spoke with, over the past 3 years the commercial space launch industry has experienced a steady buildup of research and development efforts, including ground tests and low-altitude flight tests of reusable rocket- powered vehicles that are capable of takeoffs and landings. Manned commercial space launches took place for the first and only time with the five manned flights of SpaceShipOne in 2004. Although additional manned flights were anticipated, they have not materialized since we issued our report in 2006. A number of companies—including Scaled Composites, which is developing SpaceShipTwo—are continuing to develop vehicles for manned flights, but they are not yet developed to a testing stage, which would require a launch license or experimental permit. Since we reported in 2006, private companies and states are developing additional spaceports to accommodate anticipated commercial space tourism flights and to expand the nation’s launch capacity. In 2006, there were six FAA-licensed spaceports and eight proposed spaceports. Since then, one of the proposed spaceports (Spaceport America in New Mexico) has begun operating and one (Gulf Coast Regional Spaceport) has terminated its plans. Two new spaceports in Florida have applied for FAA licenses. Figure 2 shows the existing and proposed spaceports and federal launch sites used for commercial launches. States have provided economic incentives to developers—including passing legislation to decrease liability and lower the tax burden for developers, according to FAA—to build spaceports to attract space tourism and provide economic benefits to localities; FAA has provided funding assistance for infrastructure development. For example, New Mexico provided $100 million to construct Spaceport America. According to an official from the Oklahoma spaceport, Oklahoma provides approximately $500,000 annually to the spaceport for operations, and the state paid for the environmental impact statement and the safety analysis needed to apply for an FAA license. The Florida Space Authority, a state agency, invested over $500 million in new space industry infrastructure development, including upgrades to the launch pad, a new space operations support complex, and a reusable launch vehicle support complex. The Mid-Atlantic Regional Spaceport receives half of its funding from Virginia and Maryland, with the remainder coming from revenue from operations. According to FAA, Florida and Virginia also passed bills that grant an exemption from state income tax for either launch services or gains achieved from providing services to the International Space Station. In addition, the Mojave Spaceport in California received an FAA Airport Improvement Program grant of $7.5 million to expand an existing runway to allow for the reentry of horizontally landing reusable vehicles. FAA faces challenges in ensuring that it has a sufficient number of staff with the necessary expertise to oversee the safety of commercial space launches and spaceport operations. In addition, FAA will need to determine whether its current safety regulations are appropriate for all types of commercial space vehicles, operations, and launch sites. FAA will also need to develop safety indicators and collect data to help it determine when to begin to regulate crew and passenger safety after 2012. Continuing to avoid conflicts between its dual roles as a safety regulator and an industry promoter remains another issue to consider as the space tourism industry develops. In 2006, we raised concerns that if the space tourism industry developed as rapidly as some industry representatives suggested, FAA’s responsibility for licensing reusable launch vehicle missions would greatly expand. FAA’s experience in this area is limited because its launch safety oversight has focused primarily on unmanned launches of satellites into orbit using expendable launch vehicles. Many companies are developing space hardware of different designs that are being tested for the first time, requiring that FAA have a sufficient level of expertise to provide oversight. In addition, FAA has to have an adequate number of staff to oversee the anticipated growth in the number of launches at various locations. We recommended that FAA assess the levels of expertise and resources that will be needed to oversee the safety of the space tourism industry and the new spaceports under various scenarios and timetables. In response to our recommendations, FAA’s Office of Commercial Space Transportation hired 12 aerospace engineers, bringing its total staff to 71 full-time employees. In addition, since our report, FAA has established field offices at Edwards Air Force Base and NASA’s Johnson Space Center in anticipation of increased commercial space launches. We believe FAA has taken reasonable steps to ensure that it has adequate resources to fulfill its safety oversight role. However, if the industry begins to expand, as senior FAA officials predict, to 200 to 300 annual launches, a reassessment of FAA’s resources and areas of expertise would be appropriate. Moreover, as NASA-sponsored commercial space launches increase, FAA’s need for regulatory resources and expertise may change, according to industry experts we spoke with. FAA faces the challenge of ensuring that its regulations on licensing and safety requirements for launches and launch sites, which are based on safety requirements for expendable launch vehicle operations at federal launch sites, will also be suitable for operations at spaceports. We reported that the safety regulations for expendable launch vehicles may not be suitable for space tourism flights because of differences in vehicle types and launch operations, according to experts we spoke with. Similarly, spaceport operators and experts we spoke with raised concerns about the suitability of FAA safety regulations for spaceports. Experts told us that safety regulations should be customized for each spaceport to address the different safety issues raised by various types of operations, such as different orbital trajectories and differences in the way that vehicles launch and return to earth—whether vertically or horizontally. To address these concerns, we reported that it will be important to measure and track safety information and use it to determine if the regulations should be revised. We did not make recommendations to FAA concerning these issues because the Commercial Space Launch Amendments Act of 2004 required the Department of Transportation (DOT) to commission an independent report to analyze, among other things, whether expendable and reusable vehicles should be regulated differently from each other, and whether either of the vehicles should be regulated differently if carrying passengers. The report, issued in November 2008, concluded that the launch of expendable vehicles, when used to lift reusable rockets carrying crew and passengers, as well as the launch and reentry of reusable launch vehicles with crew and passengers, should be regulated differently from the launch of expendable vehicles without humans aboard. Similar to our finding, the report noted that the development of a data system to monitor the development and actual performance of commercial launch systems and to better identify different launch risk factors and criteria would greatly assist the regulatory process. FAA has not developed such a data system because so few commercial launches have occurred. Although FAA is prohibited from regulating crew and passenger safety before 2012 except in response to serious injuries or fatalities or an event that poses a high risk of causing a serious or fatal injury, FAA is responsible for the protection of the uninvolved public, which could be affected by a failed mission. FAA has interpreted this limited authority as allowing it to regulate crew safety in certain circumstances and has been proactive in issuing a regulation concerning emergency training for crews and passengers. However, FAA has not developed indicators that it would use to monitor the safety of the developing space tourism sector and determine when to step in and regulate human space flight. To allow the agency to be proactive about safety, rather than responding only after a fatality or serious incident occurs, we recommended that FAA identify and continually monitor indicators of space tourism industry safety that might trigger the need to regulate crew and passenger safety before 2012. According to agency officials, FAA has not addressed our recommendation because there have been no launches with passengers. When such launches occur, those same officials told us, they intend to collect and analyze data on safety-related anomalies, safety-critical system failures, incidents, and accidents.