California eyes new space industry

State debates offering incentives to lure budding companies

Virgin Galactic, the company’s SpaceShipTwo fires its rockets over Mojave, Calif., after it was dropped from its
Virgin Galactic, the company’s SpaceShipTwo fires its rockets over Mojave, Calif., after it was dropped from its "mothership’ WhiteKnightTwo in April. States other than California are looking to lure new companies

SAN FRANCISCO — As several new private ventures to take people on trips to space come closer to reality, California lawmakers are racing other states to woo the new space companies with cushy incentives.

They are debating a bill in Sacramento that would insulate manufacturers of spaceships and parts suppliers from liability should travelers get injured or killed on a voyage, except in cases such as gross negligence or intentional wrongdoing. Last year, the state enacted a law that shields space tourism companies such as Sir Richard Branson’s Virgin Galactic from similar lawsuits.

“We’re still in the fledgling part of space flight and space travel, and we need people to be able to take a risk,” said California Republican Sen. Steve Knight, who introduced the state bills.

Several other states — including Texas, Florida, Virginia, and New Mexico — have passed similar laws, hoping to lure newcomers to the more than $200 billion commercial space flight industry.

California’s latest bill faces opposition from several lawmakers who say the state should not relax its standards because tourists should expect the ships they use to ascend to the heavens are safe. But space tourism companies say the protection is necessary if the state wants to attract and retain the industry’s business.

“Someday, something is going to crash and burn,” said Kathleen Allen, a professor of entrepreneurship at the University of Southern California who researches and advises space companies. “The question is: Are we going to be able to say that’s a price we pay to stretch and explore and go beyond our current limits?”

Edwin Sahakian dreamed of flying in space since he watched Buzz Aldrin and Neil Armstrong set foot on the moon almost 45 years ago. Mr. Sahakian, 50, a trucking company owner from Glendale, Calif., is one of more than 600 people who have collectively paid about $75 million to embark on a trip in space with Virgin Galactic.

Leaving the planet is worth the risk, he said. Without incentives like limiting the ability of customers and family members to sue, he said the opportunity would never be open to him.

“I’m not under the impression that it’s as safe as flying on an airliner or anything remotely like that,” he said. “But I do feel like it’s the safest way to go to space right now.”

In April, Virgin Galactic’s space ship made its first powered flight. The firm expects to start flight testing this year and send people into space soon thereafter.

Entrepreneur Elon Musk’s SpaceX is ferrying cargo to the International Space Station. Last year, SpaceX signed a deal with Nevada-based Bigelow Aerospace, which is designing inflatable space stations.

Regulatory and economic incentives play a big role in where firms choose to do business, said Andrew Nelson of XCOR, which is hoping to conduct flight tests for its Lynx spaceship this year.

Last year, XCOR — which operates at Mojave Air and Spaceport in Southern California — announced it would place a research and development center and corporate headquarters in Midland, Texas. That state offered economic and other incentives that California couldn’t.