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"He was talking about building an extremely powerful engine here," Caceres says from his office in Fairfax. "I sensed he had trouble with his engine development...Whatever the technical problems are, businessmen like to think that if you throw enough money at it and give the engineers all the materials and resources they need, it will get solved." Michael Carden was one of the developers of the rocket fuel. At age 30, he was a student at Iowa State University and the owner of X-L Space Systems. His company developed a method of producing highly concentrated hydrogen peroxide, a concept he developed with ISU support. In 1997, he resisted cozying up to the university and losing his intellectual property rights in favor of trying to sell his fuel recipe on the open market. The merits of disinterring this fuel system were debated in the fly-boy geek world, and the verdict wasn't in. Late last year, the editorial board of Aviation Week & Space Technology summed up the range of opinion: "Some space-savvy engineers thought the...launch system's approach, with a hydrogen peroxide propulsion system, was odd. Others saw it as brilliant." Carden attracted Beal's attention with his proposal for the X-Prize, a contest sponsored by a private space tourism foundation. The X-Prize Foundation is offering a $10 million bounty to the first privately funded craft to carry three people to suborbital space (62 miles) then repeat the feat within two weeks. Carden's hydrogen peroxide fuel (which never got past the proposal) and entrepreneurial spirit seemed a perfect fit for Beal Aerospace. In April 1998, the Iowan met Beal at the bank headquarters in Dallas. "I had a very good impression. I never felt like he was a millionaire," Carden says. "I mean, he flies economy." He signed up as a peroxide scientist with Beal Aerospace. Bringing the concentrated hydrogen peroxide production in-house cut costs by two-thirds, and with the amount of fuel required, that meant a vast saving. "Andy Beal pinches every penny until it squeals," Carden says. But there were problems almost from the start. The young Carden was annoyed by delays and hassles from inside and out. "A project this size is almost impossible to manage at all, and the management was trying to micromanage everything," he says. A particular irritant was the internal software system, Primavera-3, designed to keep everyone on the same page. "Staff engineers spent half their time playing with P3 instead of being on the floor." Carden wished Beal was around more. "Looking back, if he stepped into the role of project manager, he could have gotten something off the ground. Unfortunately, he had many other responsibilities with Beal Bank." There was another problem; the feds wanted to keep a close eye on the Iowans. The Bureau of Alcohol, Tobacco and Firearms came to the door of one of X-L's senior scientists and inferred that he ran a methamphetamine lab based on the chemicals he was buying for the company. The problem was resolved quickly, but the scientist was insulted. "It really exposed, I don't know about harassment, but intimidation. The BATF agent just came to his door and said, 'You better come clean on this.'" As the company progressed, Beal recruited more experienced talent. Walter Lewis, a 30-year veteran of the aerospace business, was tapped as vice president of business development. Lewis brought a wealth of knowledge about satellite customers and their products and was pleased to use that knowledge to advance his field. "[Beal] did a lot of homework," he says now from his desk at International Launch Services, a satellite launch provider based in Virginia. "He was driven to do this. He had some personal reasons. He wanted to bring the cost of launching down, which I really believe in." Lewis' job with Beal Aerospace was decidedly different from previous work at megacorps such as Hughes and Boeing. "It was great in that respect. There was kind of an entrepreneurial spirit there. I always thought we were competing against the big boys. I enjoyed that," Lewis says. "I did find it a little difficult working for a single individual...It was a plus and a minus. The company could be nimble and make quick decisions, but he could get out of bed and change his mind." Lewis adds: "The best example of this is that Andy got out of it." The bureaucracy at Beal Aerospace may have been slim, but the U.S. government bureaucracy was still a serious hindrance. No problem was greater than the State Department's refusal to give an export license to the company to ship its rockets out of the country for cheaper launches. The position became a frustrating unknown for the entire company and caused months of expensive delay. The crux of the issue is the Missile Technology Control Regime (MTCR), a treaty signed in 1987 that was supposed to reduce a nation's ability to buy or sell long-range missile technology. Not only is MTCR failing, it's hamstringing space exploration. The problem with the treaty is space launch vehicles use parts similar to intercontinental ballistic missiles and other long-range missiles, and the treaty only affects those who try to use rockets legally. The missile "criminals" like Iraq don't consider signing the treaty. Beal Aerospace got caught in this dilemma when it tried to launch from South American spaceports. The company needed the State Department to sign off on export licenses and wasn't getting a good response. "There was a key individual or two in the State Department who had reservations," says Spoede, declining to get into deeper detail. To break the institutional deadlock would have taken a supreme effort involving lobbyists and pubic relations drives in Washington, D.C. Even peaceniks recognize the treaty is regarded as a failure. The Center for Non-Proliferation Studies stated in a recent position paper: "MTCR now sits on the horns of dilemma: It is increasingly under fire for its perceived failure to stem the missile proliferation tide at the same time it is admonished for aggressive and discriminatory technology denial...Odious is the implicit position of several founding members that they will not support new and even ongoing space launch vehicle programs." The treaty was yet another hassle in a long string of hassles, and it was hampering Beal Aerospace's viability by throwing a cloak of uncertainty over the program. "Andy had a lot of struggles with it," says Carden. "There was nothing military about a 40-year-old rocket...For a month, we couldn't talk about the rocket at all." Carden began distancing himself from Beal in early 1999, becoming an independent contractor employed by Beal under a six-month contract. When Beal folded his hand, Carden simply accepted the previous ISU offer to market his fuel. The school gets two-thirds of the royalties for its help and the intellectual property rights, and the scientists get free marketing and the intellectual gravitas of having university affiliation. Now, the scientist who was outraged at government bureaucracy is just another defense contractor peddling his wares to NASA and the Air Force. |
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