Is space the new black? Well, I’m probably the last to know, but 2012 had some
amazing “firsts”: in March of that
year, an Austrian daredevil named Felix Baumgartner made a 24-mile skydive; in
that same month, an unmanned commercial space capsule named Dragon linked up
with the International Space Station; in August the rover Curiosity landed on
Mars, and Neil Armstrong, the first person to walk on the moon, died.
With all the news about the privatization of space in the
last couple of years, I’ve been wondering just how many ways there are to make
money out there. Well, it appears
there are at least 10—and at least 38 companies already in existence to profit
from what they hope is a gold mine in outer space. Many of them are publically held, meaning that ordinary
people can buy their stock. And as
far as I can tell, all of these companies come from Europe or the United
States; if any non-western countries are represented, I can’t find them.
Pretty astonishing, no?
The term being used to describe these ventures is “NewSpace”,
which replaced the earlier moniker “alt.space”, used in the mid 2000’s. What NewSpace companies have in common
is that they are funded by private means and only use government funding as
secondary sources. Thus far in
2013, ten billionaires have made investments in these ventures, including folks
like Larry Page (a Google founder), Paul Allen (a Microsoft founder), Jeff
Bezos (founder of Amazon), Eric Schmidt (CEO of Google), and Sir Richard
Branson (founder of Virgin Atlantic Airways).
There are several things of significance here, not the least
of which is that gambling on making money from space is both a high-risk and a
high-reward venture, just the sort of activity you’d expect from western
entrepreneurs. It may also mean
that should space offer significant business opportunities, the western world
will benefit the most—both in dollars (or pounds or euros) and in natural
resources. Not to mention
experience.
But before we get into the specifics of the opportunities,
we should define some terms. First
of all, what is “space”? Well, as
you might expect, there is no firm boundary to tell you when you are officially
in outer space. However, 62 miles
above sea level is the generally accepted line. Above this point there is no significant atmosphere. If you’ve ever seen the northern lights,
then you know where this approximate boundary is. Meteor showers show up below this point (at altitudes of
about 50 miles), weather balloons go as high as 30 miles, and Felix Baumgartner
skydived from 24 miles up. An
astronaut is someone who has been more than 50 miles above the earth.
Now, you might think that being 62 miles up, or in outer
space, is a long way from home.
However, it is lower than “low earth orbit” (LEO), which encompasses
altitudes between 100 and 1,200 miles.
The International Space Station is at an altitude of 250 miles, and the
Hubble Space Telescope is at 347 miles.
The Shuttle was designed to operate at 120 to 600 miles above the
earth. Sputnik, the first
satellite, orbited at 133 miles.
Satellites involved with remote sensing occupy the range of altitudes
between 370 and 500 miles, and most communications satellites are within LEO.
“Medium earth orbit”, or MEO, ranges from 1,240 miles to
21,000 miles, and this is where the so-called “geostationary satellites”
operate—these are the ones we use for our GPS devices.
I presume that, like me, almost everyone would guess that
most (or all) of the manmade devices in outer space were put there by some
government. And I presume it would
not be a surprise to learn that the United States and Russia have launched the
most satellites.
But in researching this blog, I was pretty shocked to learn
that Orbital Sciences Corporation, located in Vienna, Virginia, has been
manufacturing and launching satellites since 1982! And it is no tiny company—with 3,700 employees and revenues
of $1.3 billion, they’ve built 174 satellites and 569 launch vehicles.
So contrary to what some of the recent news would have you
believe, the commercialization of space started several decades ago. But perhaps it is fair to say that the
momentum is building.
And here, in my opinion, are the top 10 commercial markets
with the potential for generating money in space:
1. Rockets, Satellites, and Launch
Systems
2. Space Tourism
3. Resource Extraction (including
metals and energy)
4. Earth Reconnaissance
5. In-Space Services
6. Spaceports
7. Space Manufacturing
8. Microgravity Research
9. Space Burial
10. Space Advertising**
** I certainly
hope space advertising never gets off the ground. I mean, can you picture a huge billboard visible from earth
advertising Coke? No thanks. Where is Lady Bird Johnson when you
need her?
I would presume that the first category—Rockets, Satellites,
and Launch Systems—is the most well-known and the easiest to understand. Many people are familiar with SpaceX’s
successful delivery of cargo to the International Space Station in 2012 and the
safe return of cargo back to Earth in a craft (the Dragon) that SpaceX designed
and built. They have a manned
flight planned for the next 2-3 years, and according to their website, they
already have contracts in place representing 50 future launches and $5 billion
in revenue.
The idea of Space Tourism is also pretty easy to
understand—simply, you pay to take a ride into space. To date, there appears to be only one company in this
business arena: Space Adventures. They have arranged for seven people to
fly into space already (the first tourist went to space in 2001 on a flight to
the International Space Station), and the company claims to have already booked
half a billion dollars in future flights (the seven tourists who have already
gone into space paid between $20 and $40 million apiece). Other companies currently have plans to
enter this “space”. For
example, Virgin Galactic is hoping to have routine commercial flights that take
six passengers at a time up to an altitude of 68 miles. For only $200,000, you can get yourself
a seat on one of these flights, but better hurry—according to the company’s
website, at least 500 people have already made a $20,000 down payment.
A handful of companies appear to be involved in what I’ve
called Earth Reconnaissance (number 4 on the list). These are companies that have built and are operating
satellites to take high-resolution photos and videos of planet earth. Two companies in this space—Skybox
Imaging and Planet Labs—envision “flocks” of satellites imaging the entire
earth multiple times a day. The anticipated markets for these
exceedingly high-resolution images include the oil and gas industry, real
estate and construction, natural resource management, mining, maritime ship
tracking and guidance, insurance and infrastructure monitoring, urban planning,
emergency response, and crop intelligence.
Planet Labs launched two microsatellites called Dove-1 and
Dove-2 as test subjects in the spring of 2013, and by December, they hope to
have a flock of 28. These
microsatellites are indeed tiny—having a volume of about a quart and weighing
in at about 3 pounds (this was truly astonishing to me, as prior to researching
this blog post, I thought a satellite was about the size of a room). And in a spirit of full disclosure, I
must acknowledge that one of my sons is an employee of Planet Labs—so in a
roundabout way I’m benefiting from the commercialization of space too.
Moving from the “here and now” to more futuristic space
endeavors, some companies are targeting asteroids, moons, and planets for
Resource Extraction, number 3 on my list—the mining of minerals and/or
fuel. Now it seems to me that this
would be unrealistically expensive at the present time since the value of any
minerals or fuel brought to earth from space would be dwarfed by the cost of extraction
and transportation. However,
having said that, in 2012 some very smart entrepreneurs such as James Cameron
(film director) and Larry Page (Google founder) started a company called
Planetary Resources.
The business concept behind Planetary Resources is focused
on the potential depletion of some of the earth’s minerals. For example, platinum (used in circuit
boards) may be depleted in as little as 20-30 years. Claims are made on the company’s website that a 1,500-foot-wide
asteroid contains 174 times the earth’s current yearly output of platinum. I’m
not sure how much faith to place in these numbers because it doesn’t appear
that scientists are THAT certain about the composition of asteroids. NASA is planning an unmanned expedition
to an asteroid in 2016 for the purpose of taking a sample, but it is claimed
that a small asteroid only 30 feet in diameter would contain 110 pounds of rare
metals like platinum and gold.
It seems to me that bringing back large quantities of gold
and platinum would collapse the world price of these metals—the old supply and
demand curve at work—and thus jeopardize Planetary Resources’ business
model. It might even jeopardize
the economies of whole countries, not to mention the bank accounts of individuals
whose assets are tied up in precious metals. But having an overabundance of minerals should ultimately be
to the world’s benefit, as it would certainly diminish concerns about the earth
running out of resources.
Interestingly, the first project Planetary Resources is
working on is a space telescope with the catchy name of ARKYD 100. It is not clear exactly what this
telescope is going to do, but certainly one use is to determine the composition
of asteroids.
The thing on my list that really shocked me was Space Burial
(#9). I never suspected that
companies actually exist to do this, but in fact it has been going on since
1997, when a portion of the cremated remains of four individuals (including
Gene Roddenberry, creator of Star Trek, and Timothy Leary, LSD head-case) were
launched into space as a minor part of flights with a different primary
purpose. One particular company,
named Celestis, seems to have been involved in all space burials to date. It has conducted 13 burial missions so
far, the last of which involved the remains of 308 individuals that went to
space aboard the SpaceX Dragon in 2012.
What Celestis does is handle the placement of cremated remains on a
space flight, either 1 gram or 7 grams depending on the level of, ugh,
“service.” There are four different
categories of service ranging in price from $995 to $12,500: a quick
up-into-space-and-down-again, with the remains capsule vaporizing as it
re-enters the atmosphere; an earth orbit; a lunar orbit; and a “voyager”
service in which the remains are shot out into space.
And last but not least, Space Manufacturing (#7). No companies are currently
manufacturing anything in space, but it is theorized that some important
benefits would accrue from space’s low gravity and lack of atmosphere,
including the elimination of sedimentation; better control of liquids and
gases, and possibly more control over mixing of some compounds. Since space is ultraclean, processes now
requiring clean rooms could benefit too.
There may be other benefits, especially where the manufacturing process
requires strong temperature gradients.
I’d like to finish with some thoughts on one of the pioneers
in this field—William Stone, who has the same kind of adventurous personality
personified by Lewis and Clark in their exploration of what is now the western
United States. Stone is one of the
most incredible athletes in the world, excelling in cave exploration, which
requires many diverse skills like mountain climbing, scuba diving, and rock
climbing. In addition, he has
developed very specialized equipment for his explorations, ranging from an
innovative underwater re-breathing apparatus to 3-D mapping equipment and even a
machine for melting through Antarctica ice.
Interestingly, he is one of the founders of a company called Shackleton Energy,
which was named after Ernest Shackleton, a famous Antarctica explorer. Shackleton Energy plans to mine the
moon for water, which would then be decomposed into oxygen and hydrogen and
ultimately re-formulated into hydrogen peroxide for use as rocket fuel.
That pretty much sums it up. The privatization of space will
require the brains, imaginations, skills, and daring of our planet’s most intrepid
explorers and entrepreneurs. The
Sir Richard Bransons, James Camerons, Larry Pages, and William Stones of the
world may be the present-day counterparts of Meriwether Lewis, William Clark
and Ernest Shackelton. I fully expect
that William Stone will be a passenger on the first commercial moon landing.
Then he’ll try to go caving on the moon.
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