As a technophile, for decades I have maintained an interest in space developments, so the current boom in space, especially the private space race, has been enormously entertaining. While reading and studying for a class in finance, I saw things a little differently. This following essay shares one such shift I experienced.
Last year, about this time, The Economist (2019) did a big spread about how space is different recently, with more private companies (SpaceX, Blue Origin, and Virgin Galactic being the 3 most well known) and new governments (Mexico and China, for example) not just headed for orbit, but the moon. All this renewed activity has led to the cost of sending things into space dropping, because of efficiencies of scale and increased reuse of components. Lower costs open up incredible opportunity, including space tourism, mining, and additional scientific research.
One way to understand the cost reductions is to compare how much it has cost in the past to put 1 kilogram into orbit. Cobb (2019) claims that costs from 1970 to 2000 remained around USD\(18,500 per kilogram. With the Space Shuttle, between 2000 and 2011, the cost was around USD\)54,500 per kilogram. SpaceX’s Falcon 9 costs around USD\(2,720 per kilogram (Cobb, 2019). At a press conference in 2019, Elon Musk speculated that SpaceX’s new rocket, still in development, could cost a mere 10% of the current price, or USD\)272 per kilogram (SpaceX, 2019).
Experts expect these lower costs to open up previously impossible opportunities such as space tourism to low earth orbit hotels and asteroid mining. The nature of these opportunities are specifically profit, and where there is profit, private companies proliferate. For an example of the kinds of profit that might be available, last year many outlets such as Bloomberg, reported on 16 Psyche, an asteroid potentially containing more gold than all the gold mined on earth to date (Smith, 2019). Though this seems exciting, Bloomberg’s spin is that a glut of that much of a resource would probably crash the world economy. Reading in our text made me further consider the impact on poorer countries that mine and trade in gold. Should a glut of gold drop the price, those who are most reliant on income from its trade would suffer most. With reduced income, countries with a current comparative advantage in gold would lose their advantage. Such a failure would have many knock-on effects, including the inability to pay for services for citizens, inability to service debts, or make infrastructure investments.
There are also reasons to think this scenario might never unfold. Fifty years ago, international law made space a shared commons available to all and owned by none. As The Economist (2018) points out, the laws created are from an age that could not imagine the kinds of capital available for private space companies, so space exploration was only the domain of big governments.
Appendix: List of Commercial Space Companies
I do not know exactly how many private space companies there are, but I recently started keeping a list. The companies in the Lunar section of this list are predominantly those that have purchased slots on Astrobotic's next lander mission.
- Launch Platforms
- Lunar
- Astrobotic - Lunar Lander 1 Astroscale
- Elysium - lunar memorial service
- DHL
- Lunar Mission One
- AngelicvM - Uni Lunar Rover
- MoonArk
- PULI - time capsule company
- ATLAS Space Operations, Inc - Data Services
- The Arch Libraries
- Canadensys - STEM company
- Carnegie Mellon U
- Dymon Co., Ltd. - Lunar Rover
- Companies with space ambition
- Satellites
Resources
Photo by Mehdi Babousan on Unsplash
Cobb, W. W. (2019). How spacex lowered costs and reduced barriers to space. https://theconversation.com/how-spacex-lowered-costs-and-reduced-barriers-to-space-112586
Smith, N. (2019). Asteroid 16 psyche and all that gold won’t make earth richer. Bloomberg. https://www.bloomberg.com/opinion/articles/2019-07-08/asteroid-16-psyche-and-all-that-gold- won-t-make-earth-richer
SpaceX. (2019). Starship update. https://www.youtube.com/watch?v=sOpMrVnjYeY
The Economist. (2018). The economist explains - who owns what in outer space. https://www.economist.com/the-economist-explains/2018/06/12/who-owns-what-in-outer-space
The Economist. (2019). Lunar exploration - is it time to go back to the moon? https://www.economist.com/science-and-technology/2019/07/18/is-it-time-to-go-back-to-the-moon