Lunch with Guest Speaker Elon Musk by elh30365

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                   FEDERAL AVIATION ADMINISTRATION

                             +     +    +    +    +

                 INTERNATIONAL AVIATION SAFETY FORUM

                     "SAFETY FROM TOP TO BOTTOM"

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                             LUNCH SESSION

                     THURSDAY, NOVEMBER 2, 2006

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                         Westfields Marriott
                    17450 Conference Center Drive
                      Chantilly, Virginia 20151




ELON MUSK Guest Speaker, Chairman and
         Chief Executive Officer, SpaceX




                            NEAL R. GROSS
                        COURT REPORTERS AND TRANSCRIBERS
                            1323 RHODE ISLAND AVE., N.W.
(202) 234-4433              WASHINGTON, D.C. 20005-3701    www.nealrgross.com
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1                            P-R-O-C-E-E-D-I-N-G-S

2                                                                          1:09 p.m.

3                      ADMINISTRATOR BLAKEY:                       -- and he's going

4    to talk to you about this and I won't keep going

5    through his track record because I know he will fill

6    it in, but he's been gracious enough to also say that

7    he'll take questions at the end which I have a feeling

8    will work for this crowd because when Elon sets his

9    mind to doing things the happen and they tend to

10   happen in advance of the rest of us.                             Please welcome

11   our featured speaker, Elon Musk.

12                     (Applause)

13                     MR. MUSK:            Well, thank you very much.                         I

14   certainly hope I do remote justice to those words.

15   So, it's a pleasure to be with you today.                           It's a rare

16   honor when a rocket builder is invited to speak before

17   an aviation audience like this and I hope you find my

18   words interesting.              I think, you know, one issue that

19   really does unite the aviation and rocket worlds is

20   the        question   of     safety        and     reliability.           There's

21   really nothing more important than that.                              You know,

22   although at SpaceX we're focusing on changing the cost

23   equation associated with space travel and dramatically

24   improving        that      cost      equation,          we're     also    focused

25   before we even address the question of cost, on the

                                    NEAL R. GROSS
                                COURT REPORTERS AND TRANSCRIBERS
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1    question of reliability because until space approaches

2    the level of reliability that we've come to expect in

3    at      least      general      aviation,         it's        not    going      to      be

4    something that most people are willing to accept and

5    do.        So I thought perhaps one place to just start here

6    is talk about my car.

7                           It's actually not the electric cart, but I

8    have         a   car    which   is     a   McLaren        F1.        It's      almost

9    airborne.               (Laughter)          To     give        you    sort       of          a

10   comparison of the rocket and the car, we have a rocket

11   called the Falcon 1.                 It develops about almost 80,000

12   pounds of thrust at sea level, a little more than that

13   at vacuum.             Three seconds after launch, the rocket is

14   actually going quite slowly.                     It's only doing about 50

15   air miles an hour.               The McLaren F1 is doing 60 miles

16   an hour after three seconds.                       The -- the McLaren F-1

17   at about six seconds is doing 100 miles an hour and

18   the rocket is doing, you know, about 30 to 40 miles an

19   hour.            How about when you get to the three-minute

20   mark, they have changed a little bit.                                The Falcon 1

21   rocket will do -- it will be doing about Mach 10 after

22   three minutes.

23                          After 10 minutes it's doing Mach 25.                           And

24   so that's definitely a new regime of speed.                                      So, I

25   mean, it helps to illustrate just how different space

                                     NEAL R. GROSS
                                COURT REPORTERS AND TRANSCRIBERS
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1    is from our normal perception of speed.                                You just

2    don't see anything terrestrially that goes remotely

3    that fast.           And in order to go that fast, you have to

4    input a heck of a lot of energy.

5                         You know, typically, aviation things are

6    about 10 times as hotter or more expensive than say a

7    car, a terrestrial thing, and I think you basically

8    jump up about another order of magnitude when you go

9    to space stuff.               So let me talk about this whole

10   question of where is space going, you know.                           Are we at

11   the dawn of something or are we not?                          I think we are.

12     I think we're really entering a new era of space

13   exploration.           A year ago at this conference, I was

14   part of a panel entitled Private Human Space Flight.

15   You Can't Be Serious, Can You?                         Well, even then and

16   certainly by now, I think the answer is emphatically,

17   yes.         In fact, last year's conference -- a year before

18   last year's conference Space Ship One from Burt Rutan

19   captured the X Prize and actually, I helped fund the X

20   Price.           I'm a trustee of the X Price Foundation.                        So I

21   was very glad to see that prize awarded.

22                        You know, this time the conference comes

23   after a year in which the future of space tourism has

24   been         brought   even     closer.           I'll       give   you      a     few

25   examples.           In June the Vega Group, looked at space

                                   NEAL R. GROSS
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1    prospects              in     Europe,     produced         a   report        that       said,

2    "Aside            from        issues     of     crowded            airspace      and        bad

3    weather, there's no reason why Europe should not be

4    leading           the       private     space       flight         industry".             This

5    August            Futron       updated        an    earlier          study     on       space

6    tourism.               The participation level is expected to be

7    something like 13 to 15,000 people per year at the end

8    of the next decade going to space.

9                             So    and     there's       more.           Vitron      Atlantic

10   announced plans to launch passengers specifically to

11   view         the       Northern       Lights       and    there's         some      of      the

12   Personal            Space       Flight        Federation            and   Alliance            of

13   Developers in the Private Commercial Space Industry

14   came together to facilitate the growth of a society

15   for regular space travel for everyone.                                        And that,

16   incidentally, is really the goal of SpaceX.                                      Although

17   we're            starting       off    with     launch         of    satellites,            our

18   long-term goal is really to help make space accessible

19   to average citizens, to keep driving the cost lower

20   and       the      reliability          higher,        to      a    point     where         you

21   could, if you wanted to, buy a ticket to space.

22                            So in fact, let me talk a bit about my own

23   company, so you can see some sort of concrete examples

24   here of the pace of progress.                             And here I'll connect

25   up      to       the    --     so     this is roughly four years ago.

                                           NEAL R. GROSS
                                     COURT REPORTERS AND TRANSCRIBERS
                                         1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                      WASHINGTON, D.C. 20005-3701               www.nealrgross.com
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1    (Laughter)              As you can see, we were just starting out.

2      That's after we cleaned the place.                                Two years after

3    that we were on the launch pad at Vandenberg with a

4    qualification unit.               That's a launch pad at Vandenberg

5    in the bottom right is part of our control center.

6    Then we did a static test of hold-down firing of the

7    main engine, Vandenberg.

8                            Here is a commercial.             And then we did our

9    first countdown of the Falcon 1 rocket in November of

10   last year.              That's on our launch -- we launched from a

11   small Island in the Pacific in the Marshall Islands.

12   And so when I run into people at a cocktail party and

13   they ask me, "What do you do", it's -- you know, I

14   say, "I launch rockets".                      They say, "Well, where do

15   you launch them"?                "I launch them from a small Island

16   in the Pacific".              It's not very credible.                    (Laughter)

17   And I sort of feel as though I should be stroking a

18   white cat at the same time (laughter).

19                           So to give you some sense of where things

20   are headed -- now, I should point out that Space X is

21   kind of in a different league from most of the things

22   you'll           read    about   when      it    comes         to    space    flight.

23   There's suborbital space flight where people are kind

24   of going up to about 60 miles and then falling back

25   down and then there's orbital space flight and the

                                      NEAL R. GROSS
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     (202) 234-4433                  WASHINGTON, D.C. 20005-3701              www.nealrgross.com
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1    type of technologies involved are quite different.

2    It's much, much harder to get to orbit than it is to

3    do suborbital flight.                To give you an example, or to

4    put         that   into    sort       of     mathematical          terms,           the

5    suborbital flight of Burt Rutan, they got to about

6    Mach 3-1/2.          Now, that's a big deal in the aviation

7    world, but to get to orbit, you need to get to at

8    least Mach 25, and that doesn't quite describe the

9    scale of difficulty because if you look at in energy

10   terms, the energy scale is the square of the velocity,

11   so it's non-linear in how difficult it is to increase

12   your velocity.

13                      So     in   order        to     figure       out    a     direct

14   comparison, you take 3-1/2 squared through 10 units of

15   energy, versus 25 squared, 625 units of energy.                                       So

16   it's about a 60 to one energy ratio between orbit and

17   sub-orbit, just to give you some frame of reference.

18   But this is what SpaceX is doing.                            We're starting off

19   with that little rocket on the left and then what we

20   have under development is our Falcon 9 vehicle.                                     And

21   Falcon 9 is -- if this was an aircraft, this would be

22   a 747 class aircraft.                In fact, the basic Falcon line

23   has three times the lift-off thrust of a 747.                                       The

24   Falcon Line S-9, the Falcon line heavy, has almost 10

25   times the lift-off thrust of a 747.                           We've got a bunch

                                    NEAL R. GROSS
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1    of launch contracts and whatnot.                            That's kind of what

2    the Falcon 9 looks like with our capsule on top, our

3    Dragon           spacecraft,        that      little       guy   on   top     there.

4    These are some of the technologies that we're using.

5    We're using something similar to what the Eclipse Jet

6    is using, the friction stir welding and that's helping

7    us reduce some of the costs.                         And that's more of what

8    our spacecraft looks like.                       That's what it looks like

9    on      part      of    the    International            Space    Station.            And

10   that's the whole concept of operation.                            Basically, it

11   lifts off, goes into a parking orbit, docks with the

12   space station and then re-enters like a blunt body re-

13   entry, kind of like Apollo and lands in the ocean.

14                          We could make it land on land, too, but

15   there's much more ocean than land, so we thought we'd

16   pick the ocean.                  Oh, actually, there's one thing I

17   should show.             So this is a launch we did earlier this

18   year, our first test launch.                        Didn't get to orbit this

19   time but we have another test launch coming up in

20   January.

21                          (Video playing)

22                          So as I said, we did our first test launch

23   earlier this year.                 We learned a lot, tested a lot of

24   systems.           This particular launch didn't quite get to

25   orbit but we have another test launch coming up in

                                       NEAL R. GROSS
                                   COURT REPORTERS AND TRANSCRIBERS
                                       1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                    WASHINGTON, D.C. 20005-3701          www.nealrgross.com
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1    January.            And then several more launches that follow

2    that.             But, you know, we do consider it a success

3    because of the amount of data we were able to gather

4    on       the       vehicle       systems       and     I        think     we're        very

5    optimistic about the next launch.                          The rocket business

6    is really a tough business.                      I guess, there's a reason

7    there's an idiomatic expression associated with rocket

8    science,           as    I've    learned       first-hand.               But     in      any

9    event, we'll get there, it's just a question of when.

10                           So talking about another concrete example,

11   you may have read about the Bigelow sub-scale space

12   station           that     was   actually        quite      successful.                They

13   launched on a Russian rocket, a sub-scale version of

14   their            eventual    manned      space       station.             And      Robert

15   Bigelow actually has plans to have a space station, a

16   commercial space station up there that has a volume

17   potentially greater than that of the International

18   Space Station and with the success of his small space

19   station, I think it's looking very likely that he's

20   really going to do.                   So if you're at all interested in

21   seeing            pictures       of    space      from          his     little       space

22   station,            just    go    to     BigelowAirSpace.com                 and       it's

23   really           quite     fascinating.            It's         got   some      bugs       in

24   there, I think, as well.

25                           So there's actually, I think, a confluence

                                       NEAL R. GROSS
                                  COURT REPORTERS AND TRANSCRIBERS
                                      1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                   WASHINGTON, D.C. 20005-3701               www.nealrgross.com
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1    of      interest         in     space       exploration.               If   you       look,

2    there's           obviously         myself,        there's         Robert      Bigelow.

3    There are also people like Jeff Bezos, the founder and

4    CEO of Amazon.                 He's got a -- he's got a spacecraft

5    development company.                      He's quite serious about it.

6    There's guys like John Carmack, who -- founder of ID

7    Software who wrote "Quake and Doom".                                    There's Paul

8    Allen,           who,    you        know,     he     was     the       co-founder           of

9    Microsoft          and       who     funded      SpaceShip         1    and     I     think

10   there's companies like Rockeplane Kistler.                                  I think we

11   really are going to see a significant groundswell of

12   interest in capital and entrepreneurs entering the

13   space business.

14                           So and there's also I think a change in

15   the         way    that        the      government            is    viewing           space

16   development.                  The    recent        NASA      Commercial          Orbital

17   Transportation                Services       contract         is    a    really         good

18   example.            In the past NASA has always driven the

19   development             of     new      launch        vehicles,          particularly

20   manned spacecraft, but recently, they decided that

21   they're going to put out a contract to service the

22   space station commercially, which is a huge change.

23   And they've allocated $500 million, conducted a large,

24   you know, a major competition this year, selected two

25   winners.           We were one winner.                 The company by the name

                                         NEAL R. GROSS
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1    of Rocketplane Kistler was the other.                                   And NASA is

2    very         serious       about     having        the         space     station          be

3    serviced by US commercial companies after the space

4    shuttle retired in 2010.                    So if things work out well,

5    SpaceX will actually be the company that replaces the

6    space            shuttle   in      taking      cargo       and         crew    to       the

7    International Space Station.

8                          Actually, I've got a little video here.

9    There's no sound for this video but this is our Dragon

10   spacecraft             approaching           the       International                Space

11   Station.            This is a true physics simulation, very much

12   speeded up though.                 There's a much longer version on

13   our website if you're interested.                                So I think the

14   advent of space really can and is happening really

15   fast.            It certainly happened fast in aviation.                                The

16   Wright Brothers flew in 1903.                          Fifteen years later,

17   mainly driven by World War I, the world had produced

18   over 200,000 aircraft and a few more figures.                                  In 1926

19   some         5800    passengers       flew      on    short       routes        in      the

20   United States so that was 23 years after the first

21   flight.           By 1938, however, the number had risen to 1.2

22   million.            By 1952, it was 25 million, by 1981, 265

23   million.            So it's jumping up in orders of magnitude.

24                         And in 2001, nearly 1.7 million passengers

25   flew in this country per day, more than flew in all of

                                     NEAL R. GROSS
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1    1938.            So    I   think    it's      really       one       can    expect              a

2    dramatic increase in the amount of space activity.                                         So

3    and obviously, safety is going to require an even

4    greater focus over time.                    I know there are legitimate

5    concerns about rockets.                     When the Congress approved

6    the Commercial Space Launch Amendments Act of 2004 it

7    put language into it that said, "Space transportation

8    is inherently risky, we have to recognize that".                                         And

9    the future of the commercial space flight industry

10   will depend on its ability to continue to improve its

11   safety           performance.         Just      as    at       the   beginning             of

12   aviation, things were very unsafe.                              You were really

13   taking your live into your hands if you jumped into

14   one of those planes.

15                         And I think that's true also in the space

16   business.             And it's going to take a little while for

17   us to really iron out all the issues and figure out

18   how to make it as safe as aviation is today.                                    I think

19   it will get there but it's important to bear in mind

20   that there will be this risky phase.                                 There will be

21   accidents, and there will be errors and all that but

22   if we don't make some allowance for that, we will not

23   make progress.             It's unfortunately an unnecessary part

24   of the whole development of a new technology base and

25   a new industry.

                                     NEAL R. GROSS
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1                          So some serious questions to be addressed,

2    for example, when a rocket is launched, should the

3    surrounding airspace be shut down and for how long?

4    How do you define surrounding?                         How long is long?               Do

5    you restrict launches to certain locations at certain

6    times?            What about weather waivers?                     How far should

7    launches occur from populated areas?                               As they stand

8    now, launches are reasonably distant from population

9    centers but if you start having lots of launches, that

10   becomes extremely difficult to maintain.                              The launch

11   sites            we   call   remote        now      would       attract     support

12   personnel, more air traffic bringing more customers

13   and ground-bound tourists to watch.                             So something that

14   starts off being remote, may not be remote for very

15   long.            I could, and I'm sure you could come up with a

16   substantial list of issues and unaddressed questions

17   about space and airspace and outer space.                              And those

18   are all good questions and we're going to need to

19   solve them over time and it's going to be a tough

20   process.

21                         But I think if we're a country that wants

22   to be the leader in space exploration, we've got to

23   march down that path and keep going even if there are

24   setbacks and issues.                 So it's not going to be easy but

25   I do think it's possible.                     So my message today is just

                                      NEAL R. GROSS
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1    really, you know, rockets are on the way.                              They're

2    already here to some degree, but I think within 10

3    years, we're going to see the whole nature of the

4    space transportation game change, and I'm optimistic

5    that the United States, just as it led the future in

6    aviation, will lead the future in space.                          So, thank

7    you.

8                        (Applause)

9                        I'm happy to take any questions that you

10   might have.

11                       FEMALE PARTICIPANT:             When can we go?

12                       MR. MUSK:        Well, it depends on what you

13   want to do. If you want to do a suborbital flight, I'm

14   told         that   Virgin   Atlantic         will      be   offering       those

15   around the end of the decade so around about -- I

16   think about three years or so, is that about right,

17   `09, so, yeah, three years, exactly for suborbital.

18   To get to orbit, we're anticipating that we will start

19   transporting NASA astronauts around either late 2010

20   or 2011 and shortly thereafter we will be offering

21   private transportation as well.

22                       Currently if you want to go to orbit, you

23   go to the space station, you have to buy a ride from

24   the Russians.           In fact, most of the people buying

25   those rides are Americans.                 It's very unfortunate, and

                                  NEAL R. GROSS
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1    so we're definitely going to change that situation.

2    And        now,     that's        --   there's        a    pretty       significant

3    difference in cost there.                         A suborbital flight you

4    could get, which is still pretty expensive, but I

5    think            initially        they're      going        to     go   for        about

6    $200,000.00.                 An    orbital        flight,         we    think        will

7    probably initially be several million dollars, 8 or $9

8    million, maybe 10, but you've got to start somewhere.

9      (Laughter)           Poor consolation but the biggest single

10   factor is reusability.                       How good can we make the

11   reusability and currently the only rocket in the world

12   that's even slightly reusable is the space shuttle and

13   the reusability cost is so great that a lot of people

14   think that maybe we -- you know, shouldn't be trying

15   to reuse them.

16                        So as -- but I'm confident that we can

17   make reusability work, and so over time, I think we

18   can get that cost lower and lower.                              The long-term Holy

19   Grail type situation, I think, is can we lower the

20   cost of transport so that if you wanted to -- I mean,

21   this is really Holy Grail stuff here, I mean, far out

22   there, can we lower the cost of transportation to Mars

23   to a point where if you sold everything on earth and

24   you owned a house of California was one of those

25   things (laughter), could you move to Mars?                                  In other

                                        NEAL R. GROSS
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1    words, could you move to Mars for about you know, a

2    couple million dollars.                    That's you know, super-far

3    out        there     and   all    that,       but     I       think     that's         the

4    objective I have in mind, you know, in the really

5    long-term because I think that's -- if you look at

6    what are important things on a really long time scale,

7    on an almost geological time scale, those things that

8    are        important       to    life      itself,        not     just        to       the

9    parochial            concerns     of    humanity,             there    was      single

10   cellular life, multi-cellular life, you know, in the

11   oceans and then crawled out of the oceans onto the

12   land.            That was a big one.

13                         And even, you know, you had Mammalian life

14   and you know, it's about 10 major events on that

15   scale, but I think on the scale would also put the

16   extension of life to another planet.                             I think that's

17   one of the most important things that life should

18   aspire to, both for defensive reasons and for you

19   know, reasons of expansion of the scope and scale of

20   the        human      experience       and     you      know,         there's        some

21   possibility that we can do ourselves in, although I'm

22   actually reasonably optimistic that we won't.

23                         Steve Wallace (FAA):                    Thank you for an

24   interesting presentation and a wonderful explanation

25   of the physics.                 I'm kind of the safety scorekeeper

                                      NEAL R. GROSS
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1    for the FAA and I also had the opportunity to work on

2    the Columbia accident investigation so I'm struck by

3    the -- you've explained the physics wonderfully -- by

4    the difference of the risks involved and note that the

5    -- I think the best rocket scientists in the world

6    have launched the space shuttle 115 times and lost

7    two.             And if you applied that rate to commercial

8    aviation in the United States, that would be 500 total

9    loss aircraft accidents every day, every day.

10                        So my question is two parts.           One is, how

11   do you -- how do you expect to achieve anything close

12   to an acceptable accident rate and it kind of leads to

13   the second part of my question which is do we view

14   this as transportation?                 We are a gathering here of

15   transportation professionals and transportation is the

16   life blood of commerce in our country and our world.

17                        MR. MUSK:     Absolutely.

18                        Mr. Wallace:       Do we view it that way or do

19   we view it as exploration or do we view it as inter-

20   galactic bungie jumping.                 I mean, is it just sort of

21   (laughter) --

22                        MR. MUSK:     That sounds like a lot of fun.

23                        Mr. Wallace:          Is it thrill-seeking?                  I

24   mean, are we trying to set the expectations of safety

25   in the context of transportation?

                                  NEAL R. GROSS
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1                     MR. MUSK:      Sure, absolutely.          Well, I do

2    think it's -- we're not there in terms of considering

3    it to be a transportation record.                  So I think from the

4    perspective of a private individual buying a trip,

5    orbital or suborbital, it's really in the vein of an

6    adventure sport and a pretty risky one at that, you

7    know, the climbing of Mt. Everest, doing, you know,

8    exotic stunt flying or something like that, but it's

9    really -- I mean, we're kind of -- from a safety

10   standpoint, you know, where they were in the first few

11   years of aviation where people were -- you know, they

12   weren't sure if the plane would work, and they'd fly

13   and discover that it didn't and that would be the end

14   of them.

15                    So we've got a long way to go because

16   you're right.      I mean, there are a lot of smart people

17   at NASA working really hard and the space shuttle

18   program, I think at this point is approaching, I don't

19   know, 70, $80 billion and despite all that money and

20   all that time and all that hard work, they've lost two

21   shuttles and that's pretty tough.                  So it's really hard

22   to improve but it's something we've got to improve and

23   I think -- you know, I think certain things would be

24   really helpful like having an escape system.                              You

25   know, we used to have escape systems, ironically, in

                              NEAL R. GROSS
                          COURT REPORTERS AND TRANSCRIBERS
                              1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433           WASHINGTON, D.C. 20005-3701        www.nealrgross.com
                                                                                       19
1    the Apollo era and then we decided that the space

2    shuttle would be so safe that nobody would need an

3    escape system.

4                          So it's going to take a lot of time and

5    effort to reduce the risk and I think, even after all

6    that, it's still going to be a heck of a lot riskier

7    than flight, air flight, particularly going to orbit

8    because          of   the   enormous        energy        requirements.          You

9    know, the -- with -- it's only barely possible for us

10   to escape earth's gravity.                         If earth's gravity was

11   just a little greater, we would be unable to do it

12   with current technology.                    After the world -- some of

13   the world's smartest scientists and engineers have

14   done everything the can to reduce the mass fraction of

15   the vehicle and to make the inert mass of the vehicle

16   as low as possible, and to squeeze every tiny bit of

17   efficiency they can out of the engine, your typical

18   rocket gets about two percent of its mass to orbit.

19   That's after you've done all those things and after

20   you've taken your safety margins to razor thin levels.

21     So it's a tough game.                 I don't know if I've answered

22   your question.

23                         I mean, in terms of -- there does have to

24   be a clearly articulated point to a lot of these

25   things and for me, like I said earlier, the point

                                     NEAL R. GROSS
                                 COURT REPORTERS AND TRANSCRIBERS
                                     1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                  WASHINGTON, D.C. 20005-3701        www.nealrgross.com
                                                                                                  20
1    really is the extension of life beyond earth.                                        I think

2    that's the point that justifies the risk.                                     If we can

3    work         towards           that    goal       of     establishing            a      self-

4    sustaining civilization, I think the right place is

5    Mars.            There's some people that think it's the moon.

6    I     think         it     becomes        very      hard      to      make     it       self-

7    sustaining on the moon but you can do it on Mars.

8                             But if we say, look, we think it's such an

9    important goal for life to be multi-planetary, that

10   we're willing to take this risk, I think that makes

11   sense.            No more questions.

12                            MALE      PARTICIPANT:                     Good     afternoon,

13   everybody. I am from the United Arab Emirates.                                            With

14   respect to space vehicles, are there any rule that

15   would involve the third party insurance in case it

16   crashes or landed in nearby countries?                                       Thank you,

17   sir.

18                            MR.     MUSK:          Sure.              Actually,         orbital

19   launches,            all       commercial        orbital           launches      purchase

20   third            party    insurance.             And     then       that's      up      to         a

21   certain limit which is called the maximum probable

22   loss, and then thereafter, it's covered by the US

23   Government.                Although         really       there's       been       very        --

24   despite thousands of rocket launches, almost no third

25   party damage.              Damage tends to occur to the rocket but

                                           NEAL R. GROSS
                                     COURT REPORTERS AND TRANSCRIBERS
                                         1323 RHODE ISLAND AVE., N.W.
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                                                                                   21
1    not typically to third parties.

2                     Actually, it's worth making a point which

3    is that a view from the perspective of space, if you

4    were to say calculate the actual square footage of the

5    earth that's occupied by people, versus the percentage

6    of the earth that is not occupied people, I mean, that

7    actual physical footprint of human beings, humans are

8    almost non-existent.           There's almost -- they're almost

9    -- the percentage of land mass or percentage of area

10   on earth by humans physically, by humans themselves,

11   is just almost nothing.                  It's almost impossible to

12   hit someone from earth unless you try really, really

13   hard and even then you'll miss.                     So it's pretty hard

14   to hit people from space.

15                    And even if you fly around the country and

16   you look down, you know, how many times -- if you look

17   down and say, "Right now we're right over a person",

18   versus right now we're not right over a person, you'll

19   be not over a person almost your entire flight.                              And

20   that's -- you know, that doesn't count like Alaska and

21     you know, the Pacific Ocean and all that.

22                    MR.   CULBERTSON:              Frank     Culbertson,          it

23   sounds like you're proposing the Big Sky theory being

24   applied to the big ground and I don't think the FAA is

25   going to buy that any more, but and you're right about

                                NEAL R. GROSS
                            COURT REPORTERS AND TRANSCRIBERS
                                1323 RHODE ISLAND AVE., N.W.
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1    the percentage, because you don't see much down here

2    but you still have to address that.                                   And I think what

3    was being asked about was the relationship between

4    where you're going and what you're trying to do with

5    what this organization is trying to do and what this

6    conference is trying to address, and I think it's

7    important for people to understand that there is a

8    bridge between aviation and the leading edge of space

9    exploration that you're trying to do and I think the

10   more you can do to show how that bridge is being built

11   and not that it's being ignored, the more likely you

12   are to get continued support in the country and both

13   from             a    safety       standpoint           and       from      a    usability

14   standpoint, because what you are building, I believe,

15   is      the          next   transportation              system.          We     need        some

16   breakthroughs                in     technology          to    get     us    through           the

17   gravity well, but it's this kind of work that will

18   help us do that.

19                           Do you see a way for what you and the

20   other            entrepreneurs           are     doing       to      take   what       you're

21   doing and move it back down the food chain, if you

22   will,            to   help     take       aviation        into       increased         safety

23   posture or to more efficiency or higher speed in a way

24   that will support both industries?

25                           MR. MUSK:            Well, I think where they could

                                           NEAL R. GROSS
                                       COURT REPORTERS AND TRANSCRIBERS
                                           1323 RHODE ISLAND AVE., N.W.
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                                                                                        23
1    connect is if you want to do really high speed, point

2    to point transport, say, you know, the New York to

3    Tokyo type of thing.                 The only way to do that really

4    fast is with a rocket.                     So conceivably someone may

5    develop some day a hybrid of an airplane and a rocket

6    that's capable of taking off from somewhere in New

7    York and landing in Tokyo that would basically go on a

8    suborbital trajectory through space and then re-enter

9    Tokyo airspace or probably off of Tokyo airspace I

10   would mention but, you know, I think that would be a

11   really interesting and exciting thing.                         It would be a

12   confluence of aircraft and rockets.                           It would be an

13   expensive trip, though.

14                         MALE PARTICIPANT:            Yes, I have a question.

15     I'm over here in the corner.                          Right, I'm actually

16   with the Office of Commercial Space Transportation.

17   And        as    I    remember    from      my     youth,     priorities          and

18   funding and familiarity grounded the Apollo program.

19   What does this human space flight or commercial space

20   transportation            have    to     continue        to   do   to   win       and

21   sustain the attention of the public?

22                         MR. MUSK:      Well, I think it's important to

23   show how what we're doing can matter to the general

24   public in the long term and why it's relevant to the

25   country.             You know, I think for awhile there when we

                                      NEAL R. GROSS
                                COURT REPORTERS AND TRANSCRIBERS
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1    were just sort of setting up space shuttles and the

2    space station, the general public was -- kind of got

3    bored and kind of confused as to what exactly we were

4    doing and why we were doing it and what's new and

5    interesting and I think there really weren't very good

6    answers to that.

7                        But now on the government side we've got,

8    I think, a much more interesting program of going back

9    to the moon and then onto Mars.                       I think -- actually,

10   I think, frankly, the public is more interested in the

11   onto Mars part, if you ask me because they've seen the

12   moon        movie   and   the     remake       is not as good as the

13   original.           So, but I think at least the fact that

14   we're going further than earth orbit is important to

15   garner public interest.                And I think some of the polls

16   that I've seen recently, public interest has perked up

17   and things like on the commercial side the Xprize and

18   what Branson is doing and Burt Rutan and all those

19   guys, I think that's also creating public interest

20   because that seems like something that even though

21   it's expensive at $200,000.00 a ticket, if that's --

22   if your life's dream is to go to space, hey, take out

23   a second mortgage on your home and buy a ticket.                                And

24   there are people who want to do that.                        And then from a

25   -- you know from a government regulatory standpoint,

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                               COURT REPORTERS AND TRANSCRIBERS
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1    it's insuring that there's this good balance between

2    it      being         safe   but    also      financially           achievable            and

3    actually, I think the FAA is doing a great job with

4    that by the way.

5                           All right, if there are no more questions,

6    thank you.

7                           (Applause)

8                           ADMINISTRATOR BLAKEY:                I know when to quit

9    when we're ahead.                  When they say the FAA is doing a

10   good job, I think, yes, that's where we've got to stop

11   it.         But I do want to thank Elon for a tremendously

12   provocative             interesting         statement.              You     know,         the

13   speech           in    conferences         today,        because        I    think          in

14   conferences like this where you do want to sort of

15   stretch your ideas about where we are going and what

16   the challenges will be and there's no question about

17   that.            Elon, I do have just a small token to say thank

18   you because we, at the FAA, are very, very grateful

19   for the tremendous intellectual energy and pursuit

20   that's           involved      with      SpaceX       and        with   the      efforts

21   you're making.               Thank you again.

22                          (Applause.)

23                          MR. MUSK:        Thank you very much.

24                          ADMINISTRATOR BLAKEY:                     Roberto, I'd also

25   like to ask President Kobeh to come up here because

                                        NEAL R. GROSS
                                   COURT REPORTERS AND TRANSCRIBERS
                                       1323 RHODE ISLAND AVE., N.W.
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                                                                                                26
1    this morning I should have also said thank you with

2    one of these for his speech this morning.                                       So I do

3    want to also present to Roberto Kobeh our thanks in

4    the form of a plaque from the FAA.                                Thank you.

5                            (Applause.)

6                            ADMINISTRATOR BLAKEY:                 Now, we have a few

7    comments              before     we'll       let      everyone        get      back         to

8    enjoying each other.

9                            MR. SABATINI:           Well, shagadelic, Elon.                     My

10   money            is   on   him    but     I've      already         got   the      second

11   mortgage so, I'm going to have to wait for the-low

12   cost rocket carriers to come on line.                                Listen, I'm not

13   going to rush anybody out of here but just a couple of

14   things.               At 2:30 we're going to start the afternoon

15   session.               We've got down here on this floor out to

16   your right leaving the room is the Lincoln Room where

17   we're were going to have a safety management system

18   model, and then upstairs we broke the room down that

19   we were in this morning into three areas for the

20   remaining three panels.

21                           Again, that starts at 2:30.                       At 2:15 for

22   folks that are interested and for the media that are

23   here today, the Administrator, Nick, Russ, myself, a

24   few others will be up at the RNAV RNP exhibit on the

25   second floor with some information about the second

                                        NEAL R. GROSS
                                    COURT REPORTERS AND TRANSCRIBERS
                                        1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                     WASHINGTON, D.C. 20005-3701              www.nealrgross.com
                                                                                        27
1    roadmap for RNP and some of the RNAV progress.                                      So

2    look         forward   to     seeing       you.         Just   mingle,     relax,

3    thanks again.

4                       (Applause)

5                       (Whereupon, at 1:49 p.m., a                   brief recess

6    was taken.)

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                                     NEAL R. GROSS
                                 COURT REPORTERS AND TRANSCRIBERS
                                     1323 RHODE ISLAND AVE., N.W.
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