To Boost Statistics, Russia Producing Rocket Engines No One Wants

The Soviet economy was notorious for producing goods no one wanted to buy so that managers could put out the kind of statistics the Communist Party bosses wanted. Something similar now appears to be going on in Russia’s beleaguered space industry: Its firms are continuing to produce rockets the United States says that it will no longer buy, private space firms like SpaceX say they do not want, and that even the Russian space program itself has rejected.

In a remarkable if not fully appreciated series of articles, Andrey Borisov of the Lenta news agency has surveyed why this has happened and what it says about the Russian defense sector as well as about the Russian economy more generally. The series culminated this week with a stinging denunciation of such waste and inefficiency and a prediction that the sector’s failure to adapt points to likely future failures in the Russian space and defense programs (Lenta, July 7).

Formally, the journalist says, Washington’s decision not to purchase RD-180 and RD-181 rocket engines from Moscow is the result of the sanctions regime introduced in 2014. But in fact, the applicable US law contains an exception allowing for purchases running into the next decade, lest the US space program be handicapped. But the United States stopped buying anyway, Borisov says, because the Russian rockets no longer meet US needs, and require an outdated kerosene fuel, rather than the new methane fuel that all space programs except the Russian one now prefer. Roscosmos, the Russian manufacturer, saw this coming even before 2014, but took no steps to modify its engines so that potential buyers would continue to make purchases. Now that failure is coming home to roost (see EDM, February 1).

Igor Arbuzov, the general director of Russian rocket engine maker Energomash, has repeatedly warned about this loss in demand; but he appears to have been overruled by Dmitry Rogozin, who oversees the Russian space program for Moscow. For his part, Rogozin has argued that it is not Russia that is dependent on US purchases, but the US that is dependent on Russian rocket engines (Lenta, January 19), a complete misreading of the situation, according to the Lenta journalist.

Just how dependent the Russian rocket engine industry has been on US purchases is reflected in figures that Rogozin chooses not to cite, Borisov says. This year alone, he says, the US had been scheduled to purchase 17 of the 19 engines the Russian firm produces. The Russian space agency has placed orders for only two. Meanwhile, no Western private space companies have shown interest in the outdated rocket engine models that Russian firms continue to produce. US firms have pulled out of this market because they are now producing a better engine that uses methane-based fuel rather than kerosene. Consequently, Russian producers are set to lose millions of dollars this year. They will lose billions in the years ahead unless things change quickly.

According to Borisov, the US began to purchase engines from Russia 20 years ago “for two main reasons”: it liked the characteristics of the Russian engines, and did not want Moscow to sell the engines to the Chinese (Lenta, September 19, 2017). But today the situation is “different in principle from what it was” two decades ago. Moscow has sold China the rights to manufacture Russian-style rockets anyway, but the Russian side has earned far less money from this than it has from sales to the United States.

Those sales are now coming to an end, and the US is unlikely to renew them even if sanctions end. Three reasons account for this, Borisov says. First, the newest US rockets need much more powerful engines than the RD-180 or the RS-181. Second, the US space industry is already prepared to supply such an engine (Lenta, March 9, 2017).

“And third and, if you will, the most important,” Borisov says, “the American heavy rockets that have been developed” use methane-based fuels, rather than kerosene, as the Russian ones do. All of this has been obvious for some time, he continues. What is not obvious is why the Russian firms and the Russian space program have not adapted—and why neither seems to recognize that this failure will make it impossible for Russia to recover this profitable market or to catch up with US missile technology anytime soon.

Borisov writes: “The Russian space branch is well known for numerous projects that exist only on paper.” Its talk about a new engine appears to be one of them, despite all the bravado Rogozin has displayed in recent comments about his sector’s ability to manufacture engines for a new “super-heavy” rocket (Lenta, June 19, 2017). But even as he talks, Borisov says, the rocket engine producers are suffering ever greater losses in constructing engines no one—including Moscow—wants to buy, while Russia falls further and further behind private companies and other countries’ space programs.

In sum, Russian rocket engine manufacturers may be able to claim they are producing more engines; but no one is buying them, and Russia is suffering as a result.