After the breakup of the Soviet Union at the end of 1991, two companies prevailed in the giant Soviet space industry, Energia and Khrunichev. With histories stretching back more than half a century, these two giants continue to dominate the Russian space program in the 21st century.

Energia (the Russian word for “Energy”) can lay claim as the founding organization of the Soviet space program. The company traces its history back to May 1946, when the Soviet government set up a small department in the design section of a new institute named NII-88 (or “Scientific-Research Institute No. 88). After the end of World War II, dozens of Soviet engineers, including the famous Sergey Korolev, spent over a year in Germany gathering information on the abandoned German V-2 rocket project. The group returned home to NII-88 to build, at Soviet leader Joseph Stalin's command, a Soviet version of the V-2. Korolev, then 39 years old, was appointed chief designer of Department No. 3 at NII-88, the unit in charge of the V-2 program. At the time, Korolev presided over about 60 engineers and 80 technicians.

In the late 1940s, Department No. 3 successfully produced a Soviet copy of the V-2 known as the R-1, launching the rockets from the barren desert at Kapustin Yar near the Aral Sea. By the early 1950s, Korolev's team had been restructured into a large design organization known as OKB-1 (or “Experimental Design Bureau No. 1”), which in 1956 separated from the NII-88 institute. Through the 1950s, OKB-1's influence grew as it designed the first Soviet nuclear-tipped missile, known as the R-5M (called the SS-3 by Americans), and the world's first submarine-launched ballistic missile, the R-11FM. In 1954, the Soviet government approved Korolev's ambitious plan to build an intercontinental ballistic missile (ICBM) known as the R-7 (or SS-6). In August 1957, this missile successfully flew 6,500 kilometres from a new launch site in Kazakhstan (now called Baikonur) all the way to the eastern tip of the Soviet Union. It was the world's first successful ICBM launch.

Korolev, a spaceflight enthusiast since his youth, convinced the Soviet government that he could launch a satellite into orbit around the Earth using the same R-7 ICBM. With government approval in hand, on October 4, 1957, Korolev launched the world's first satellite—Sputnik1-into orbit around the Earth, thus inaugurating the era of spaceflight.

In the next ten years-OKB-1's “golden era”-the organization accumulated a series of spectacular achievements. Under Korolev's managerial genius, OKB-1 launched the first human in space (Yuri Gagarin in Vostok in 1961), the first woman in space (Valentina Tereshkova in Vostok 6 in 1963), the first multi-person spaceflight (Voskhod in 1964), and the first spacewalker (Alexei Leonov in Voskhod 2 in 1965). In deep space exploration, OKB-1 launched the first probe to reach the Moon (Luna 2 in 1959), the first to take pictures of the Moon's farside (Luna 3 in 1959), the first to soft-land on the Moon (Luna 9 in 1966), and the first to reach Venus (Venera 3 in 1966). OKB-1 also developed the first Soviet reconnaissance satellites (Zenit 2 and Zenit 4) and the first Soviet communications satellites (Molniya 1), in addition to developing new ICBMs.

 
Buran/Energiya on pad.

OKB-1's great run came to an end with Korolev's untimely death in 1966. From 1966 to 1974, the organization was headed by Korolev's former deputy, Vasily Mishin, who presided over the failed Soviet program to reach the Moon using the giant N1 rocket. It was Mishin, however, who introduced a new generation of piloted spaceships named Soyuz (Russian for “Union”) that were eventually transformed into ferry vehicles for the world's first space stations-named Salyut-launched in the 1970s.

In 1974, OKB-1 merged with a rocket engine design team to form the giant Energia conglomerate. From 1974 to 1989, Energia was headed by Valentin Glushko, the Soviet chief designer for rocket engines. During this period, Energia developed a series of successful Salyut stations that led to the Mir space station, assembled in Earth orbit between 1986 and 1996. The Energia corporation also designed the giant Energia launch vehicle and the Buran Space Shuttle (a near copy of the U.S. Space Shuttle), both of which had to be abandoned in the early 1990s due to lack of money.

 
Lockheed Khrunichev Energia International (LKEI) Proton launch vehicle erection on pad, Baikonur Cosmodrome, Kazakhstan.

Since 1989, Energia has been headed by Yuri Semenov. Through the 1990s, Semenov sustained operations to Mir that culminated in a series of historic joint flights with the U.S. Space Shuttle. Mir was eventually abandoned in 2001 when the International Space Station (ISS) came on line. The Energia corporation supplied the core of the ISS, known as Zvezda (Russian for “Star”), and continues to provide the Soyuz and Progress supply ships for ISS. It also provided the Pirs docking module, and in cooperation with the U.S. company, Spacehab, is offering the Enterprise multi-purpose module for use on the Russian segment of ISS.

 
Assembly on orbit of the International Space Station began with the launch of the U.S.-owned, Zarya control module, built by the Russian company Khrunichev, on November 20, 1998,  from the Baikonur Cosmodrome, Kazakstan.

In recent years, Energia has tried to enter the commercial market with projects such as SeaLaunch-a cooperative project for launching the Ukrainian Zenit booster from sea-based platforms in which Boeing Commercial Space Company has a 40 percent stake and Energia has a 25 percent share. It has also provided seats to paying customers to fly on the Soyuz spacecraft. Two tourists, one from the United States and one from South Africa, flew to ISS in 2001 and 2002 respectively.

Energia, officially known as the Energia Rocket-Space Corporation Named After S. P. Korolev (“RKK Energia”), employed roughly 20,000 people in 1999. It has faced rough times recently, partly because of the poor Russian economy and partly because of stiff competition from its primary competitor, Khrunichev.

Khrunichev's history dates back to March 1951, when Stalin ordered the creation of an organization, OKB-23, to design a new generation of strategic bombers. The design firm was given a giant factory in the Moscow suburb of Fili to produce these new planes. This plant, later named the Khrunichev Plant, had originally been set up in 1916 to manufacture automobiles. OKB-23 designed a series of advanced bombers and cruise missiles through the 1950s. Some of its plans proved to be too ambitious, however, and Soviet leader Nikita Khrushchev closed down all of its projects in 1960. He turned OKB-23 into a branch (“Branch No. 1”) of another organization, OKB-52, headed by the famous Vladimir Chelomey, an ambitious scientist who wanted to compete with Korolev to dominate the new Soviet space program. Through the next 20 years, Chelomey assigned Branch No. 1 to design some of his most important products. These included the heavy Proton booster rocket, a number of advanced Soviet ICBMs such as the UR-100 (or SS-11) and UR-100N (or SS-19), and the Transport-Supply Ships for the Almaz military space stations.

By 1981, Chelomey had lost much of his former influence, and the Soviet government detached Branch No. 1 from him and transferred the organization to Chelomey's main competitor, Energia. Through the 1980s, the former Branch No. 1-now named the Salyut Design Bureau-helped Energia design and build the Mir space station and its various modules. Salyut became independent in 1988. Five years later, the new Russian government combined Salyut with the Khrunichev production plant in Fili to form a giant conglomerate with the tongue-twisting name of Khrunichev State Space Scientific-Production Center (GKNPTs Khrunichev).

Since 1993, Khrunichev has been aggressively marketing its assets. Some argue that it has been much more successful than Energia in earning revenues in cooperative projects with Western countries and companies. One of Khrunichev's most notable successes has been International Launch Services (ILS), a joint American-Russian company (the partners are Lockheed Martin, Khrunichev, and Energia) formed in June 1995 that markets the Proton launch vehicle for launching commercial satellites. Other projects include Eurockot, a joint project with the German Daimler Chrysler corporation to market the UR-100N (or SS-19) ICBM as a space launcher.

Khrunichev also provided Zarya (the Russian word for “Dawn”), the first module for the International Space Station, whose design was based on the old Transport-Supply Ships designed in the 1970s. Khrunichev appears poised to take over a significant portion of the Russian space launch market with the introduction of a new family of launch vehicles called the Angara, which uses a modular design for a wide variety of launch services.