Why America Needs a New Space Station: Russia's Module Is Leaking

The International Space Station is 26 years old. Born with Russia's launch of a Zarya power and propulsion module in 1998, the ISS today is comprised of 43 separate modules and other "elements," such as airlocks, robotic arms, and other major tools. Six of the seven countries that built the ISS plan to finally retire the space station after 2030 (Russia wants out by 2028).

NASA has already hired SpaceX to build a special deorbit spacecraft to push the ISS into Earth's atmosphere where it will first burn up, then plunge into the sea, in 2031. NASA's also sponsoring at least four separate teams of space companies that hope to build replacement space station(s) for when the ISS goes away.

Now, NASA may need to accelerate both of those plans -- because the ISS is leaking. That's bad news for NASA, but it may be good news for the several U.S. companies hoping to build a new space station.

Image source: Getty Images.

The ISS is leaking

A September 2024 report from NASA's Office of Inspector General warned of "on-going cracks and air leaks in the [Zvezda] Service Module Transfer Tunnel" that connects Zvezda to its docking port. The leaks were first noticed in 2019. NASA noted this April that the leaks had reached their "highest level to date" (rated 5 out of 5 on the danger scale), costing the ISS valuable atmosphere and putting its astronaut and cosmonaut crew at risk. NASA calls this leak a "top safety risk" to continuing use of the ISS.

Neither NASA nor Roscosmos have been able to identify the root cause of the problem. And with the leak rate currently up to 3.7 pounds of air per day, it's costing NASA more than $4,000 per day (or $1.6 million per year) to replace the air lost to the leak. That's admittedly only a fraction of a percent of the $4.1 billion NASA spends to operate the ISS annually -- but it's not nothing.

It gets worse.

MSN reports that there are actually a total of four active leaks in Russia's sections of the ISS, and 50 "areas of concern" (apparent scratches, imperfections, and internal and external welds) that may or may not be leaking. The crew has been advised to "confine themselves to the American section" of the space station, and even to "brace for evacuation." So in addition to building a spacecraft to dispose of the ISS years from now, Elon Musk's SpaceX has also been contracted to "come up with a contingency plan to evacuate American astronauts" in the event of a disaster.

What this means for investors

Now, don't panic yet. While the ISS leak has been persistently difficult to fix, there's always the stopgap solution of sealing off the transfer tunnel and abandoning that particular docking port. It's a suboptimal solution, to be sure, but the ISS has other docking ports. If necessary, this could enable the ISS to keep limping along until a replacement is built.

The crisis does, however, increase the urgency for NASA to pick someone to build (one or more) replacement station(s) before anything else goes wrong with the ISS. Currently, four teams are in the running:

• Privately held Vast Space and privately held Axiom Space plan to build separate, independent space stations in Low Earth Orbit.
• Blue Origin, Sierra Space, Boeing (NYSE: BA), and Redwire are partnering to build an "Orbital Reef" space station.
• Voyager Space has assembled a team of companies, including Europe's Airbus (OTC: EADSY), Northrop Grumman (NYSE: NOC), Hilton Hotels (NYSE: HLT), and others to build a "Starlab" space station.

In a recent article, however, space news site Ad Astra warned that none of these groups' plans to launch a space station by the 2030 deadline look "viable." And at least one company may be financially on the rocks. In September, Forbes and Ars Technica warned that Axiom Space was running into "significant financial headwinds," delaying payments to suppliers, and even having trouble meeting payroll for its nearly 1,000 employees.

The good news is that NASA is expected to invite bids for a second round of contracts to continue private space station development in 2025, and to award contracts in 2026. The better news is that the space agency isn't stingy with its funding. NASA has already handed out contracts worth in excess of $500 million for this endeavor. While that won't be anywhere near covering the cost of building an entire station, continued funding at this level should suffice to keep at least a couple of contenders alive as they finalize their designs and prepare first prototypes.

With multiple publicly traded space companies still in the running, investors still have a good chance of being able to own a piece of America's next space station -- something we never had an opportunity to do with the ISS.

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