California-based space exploration company Space X announced on Thursday that it is working on an orbital booster system that could fly to space and back and could be the key to colonizing Mars.

The reusable rocket could return to the launch site and touch-down vertically. The rocket would take off like other normal rockets then separate into its upper and lower stages. The lower portion would be able to make its way back to Earth and land upright which would make it available for further use.

Speaking to the National Press Club in Washington D.C. Space X founder Elon Musk said his company has overcome some of the engineering problems that have baffled others.

"I wasn't sure it could be solved, for a while, but then I think just relatively recently - probably in the last 12 months or so - I've come to the conclusion that it can be solved and I think SpaceX is going to try to do it," Musk said.

"Now, we could fail - I'm not saying we are certain of success here - but we are going to try to do it. And we have a design that on paper - doing the calculations, doing the simulations - it does work," he added. "Now we need to make sure that those simulations and reality agree, because generally when they don't reality wins."

A reusable rocket would reduce the cost of space flight and make it easier to send people to space. Conventional rockets burn through each stage and end up as space debris. A rocket can cost about $50 million to $60 million but fuel and oxygen only costs about $200,000 per launch.

"So obviously if we can reuse the rocket, say a thousand times, then that would make the capital cost of the rocket per launch only about $50, 000," Musk said.

Reusable rockets could also make inter-planetary travel possible.

"A fully and rapidly reusable system is fully required for life to become multi-planetary, for us to establish life on Mars," Musk said. "If planes were not reusable, very few people would fly."

SpaceX is close to completing the reusable rocket. The company only needs to build escape thrusters into the sidewalls of the spacecraft which is expected to take two to three years. Once that's done, the reusable Falcon 9 will be ready for use.