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Big Space Business Numbers 2.0
If numbers get repeated often enough, like in this gallery of commercial space opportunities, they start to be believed. Business 2.0 as part of a big spread on space investment opportunities in their March cover story retells some whoppers.
This is inconsistent with Futron and world launch capabilities and expense. First let's see if someone wins the America's Space Prize. Expensive travel means very little revenue. By 2025, very possible if space access costs drop. $2M/month would get a lot of takers if we can get 600kg worth of people, spaceship and consumables to orbit at $3000/kg including payload. A Progress at 2000-3000kg of payload lasts 2-3 months with three eaters.
Mars: $400B in exploration by 2030
If you just put NASA spending in line with US GDP growth and put 12 years of it to "Mars" you get about $400B.
Orbital labs: $10B/year by 2015
NASA can't even come up with a business case to finish ISS. So far the only demand has come from Greg Olsen so he could take a tax writeoff on his vacation. Hmm, maybe it will be a conference destination.
Solar sats: $100B/year by 2020.
You have to beat the marginal cost of hydrocarbons to make money on this. Julian Simon's Ultimate Resouce 2 indicates heavily against this. Methane hydrates, coal and uranium would have to be taxed to a standstill (which is not impossible) for this to be this big. Space elevators flip it.
Space elevator: $2B/year by 2021
If it works much bigger. It will probably be bigger than solar sats or asteroid mining. Without competition, almost all profits from solar sats and asteroid mining will accrue to the elevator owner.
Asteroid mining: $10B/year by 2030
The space access and demand curve math does not really work except for local consumption in space. But it would be a great place to colonize along with the Moon and Mars.
Moon: $104B in exploration by 2018, $250B in helium mining by 2050
The exploration comes from extrapolating the NASA budget: good bet; the He3 requires us to run out of uranium or patience for it. Not likely.
Microsats: $1.5B/year by 2018
Likely an underestimate as miniaturization, space access costs and dedicated launchers for microsats come into their own
Space Tourism: $1B/year by 2023
This will be bigger than hotels, which is not to say that it will be more than twice Futron's prediction repeated here. (The factor of 2 selfishly comes from games. The transport to and from the hotel is more expensive than the hotel stay.)Posted by Sam Dinkin at February 28, 2006 07:41 AM
Re Solar Sats: Methane hydrates, coal and uranium would have to be taxed to a standstill (which is not impossible) for this to be this big.
Methane hydrates are problematic for a variety of reasons. A friend in the "all bidness" says that tar sands are much more likely to be the near to medium term replacement for oil production.
In addition, while it is fashionable on the net to either doubt (or totally accept) the reality of greenhouse gas warming, it is looking more and more likely. In that case, hydrocarbon use will get taxed to death.
Nuclear plants are the best near-term solution for energy production. IMO, the US should be moving quickly towards standardized designs for mid-size reactors, probably pebble-bed designs. In addition, we should be looking at reviving breeder reactors.
Re: Asteroid mining The space access and demand curve math does not really work except for local consumption in space.
One area that might be a winner are copper, platinum and zinc. Scientific American had a short article (Google Scientific American Copper) that showed a serious shortfall in the amount of copper needed to bootstrap the developing world to US/Europe levels of development. To be sure, there are substitutes for many copper applications that could phase in as prices rise. Room-temperature superconductors are promising for wiring applications, but many seem to require high-cost trace elements - another possible market for asteroid resources.Posted by ech at February 28, 2006 09:36 AM
the He3 requires us to run out of uranium or patience for it
...also the minor details of actually demonstrating significant He3 fusion, then attaining net energy out, then proving adeqaute ROI.
But wait -- what am I thinking of? It's for space...Posted by Monte Davis at February 28, 2006 09:52 AM
If the space elevator gets built (I still have trouble wraping my mind around it) and is as profitable as they claim, 5 more will get built within a few years of the first one and the prices will come crashing down.
On the other hand, a space elevator could get built and the market for space stuff fails to appear. In which case, it will go bust just like the Eurotunnel. Then, it will get sold at auction and the second owner will make a pile of money.
Has someone bothered to go back and make an economic feasibility study for space solar power using a space elevator to haul everything up from earth rather than mining the moon and doing all of the O'neill stuff? There have been significant advances in solar cell efficiency, robotic manufacture, and development and deployment of thin film systems since the heyday of L-5.
An economic study using the space elevator is in order.Posted by Kurt at February 28, 2006 11:14 AM
>> Has someone bothered to go back and make an economic feasibility
Hell I've never seen a study assuming a realistic fleet of RLVs. I mean the big cost problems for launchers are overhead, labor cost, and relyability. If your going to lift enough build a space solar plant, you have a flight rate that demand a highly reliable, easy to service and turn around RLV, and enough flights to eat even huge overhead and startup costs. Some of the big players (McDac, Boeing, etc) were projecting cargo to orbit for down to $200 a pound with what buildable back in the day. Yet no one I ever saw ran the numbers for the feasibility of direct lift vrs. Lunar extraction with a $200 a pound to orbit launch fleet. Running the numbers assuming $10,000 is just stacking the deck.Posted by Kelly Starks at February 28, 2006 11:57 AM
I recall seeing a proposed SPS concept that could be competitive even with current launch costs. The keys would be very thin film collectors and a modular design where the units could lift themselves to GEO from lower orbit using electric rockets (ion or plasma engines). The mass of a large SPS using this approach would be in the thousands of tons, not hundreds of thousands.
Very high launch rates from Earth may be constrained by the effects of the combustion gases on the stratosphere. Current water input to the stratosphere is around 200 megatons/year (half from methane oxidation, half from other sources), so you'd hit this limit at on the order of a million tons of payload per year.
Correction: that design wasn't competitive with current launch costs, but didn't require extreme reductions. Here is a paper describing the concept. Total mass to LEO for a 2.5 GW powersat is given as less than 3000 tonnes.
Kurt: for a start, see Mervyn Kellum's "Space Solar Power with a Space Elevator," downloadable at
My understanding is that CNT can also be used to build rather nice solar panels. What kind of efficiency and w/kg do they provide, and does that change the picture any?
After all, if you have the manufacturing capability to make elevators, you should also be able to make huge CNT panels.
Copper is at about $5/kg and for industrial quantities from off-Earth to Earth we would need $30,000/kg like platinum. Trouble with platinum is that minimum tonnage for that marginal cost would be north of $50 billion at today's prices which would cause a glut for years since that is far more than annual demand. I.e., not yet feasible.Posted by Sam Dinkin at February 28, 2006 01:57 PM
Trouble with platinum is that minimum tonnage for that marginal cost would be north of $50 billion at today's prices which would cause a glut for years since that is far more than annual demand. I.e., not yet feasible.
And that is why I suggest creating artificial demand for lunar platinum and also suggest finding new uses for PGMs that will consume enormous quantities, such as Indian and Chinese rural electrification such rural electrification projects being a source of demand that can readily absorb $50 billion worth of PGM.
We do remain far from closing any of these business cases thus we need to think both creatively and critically.
= = =
Using Russian pricing for Earth-to-LEO also helps, by the way. This article by James Oberg suggests an arbitrage opportunity.Posted by Bill White at February 28, 2006 02:09 PM
If it works much bigger. It will probably be bigger than solar sats or asteroid mining. Without competition, almost all profits from solar sats and asteroid mining will accrue to the elevator owner.
There will be competition. We think that the second (and third, fourth, fifth ..) will be cheaper to build by using the existing ribbon to haul stuff upward, plus we'll have experience from knowing what works and what doesn't.
But you don't _have_ to use the first to build the second - cost is not always a determing factor in big infrastructure projects. How much would Nation State A pay for something like this for prestige reasons? A rather fragile economic choke point - if the operator is not careful he'll find himself aced out of a market he kick started.
I could be wrong - Sam is the big brains in economics, not I.Posted by Brian at February 28, 2006 02:59 PM
My big brain in economics tells me that the second, third, fourth and so on elevators will be priced at the monopoly price by the elevator co. unless someone else starts one from scratch. Nation State B might not understand the economics of elevators if the elevator co. charges the monopoly price for elevators which won't be too much lower than rockets and make all the profits disappear like they do in Hollywood. Surely there will be patents preventing meaningful competition for a decade or so after the first one gets built.
Short of someone like Elon Musk building it and giving it away, it might not spark the boom until a decade or more later.
The good news is that like the phone companies, the elevator operator can build and transport the solar sats itself with its spare capacity.
My economics intuition says platinum for rural being an unproven market does not justify a $50B investment either. Remember how iridium (the phone company) got snookered by the cheap cell phone tower roll out?Posted by Sam Dinkin at February 28, 2006 03:10 PM
My economics intuition says platinum for rural being an unproven market does not justify a $50B investment either. Remember how iridium (the phone company) got snookered by the cheap cell phone tower roll out?
Perhaps the founders of a lunar platinum space venture should sell the idea to the Indian government rather than attempt to make a direct profit selling PGM at retail. Offer an investor-partner role to the Indian government which can then justify the prestige & PR value of flying Hindus to the Moon (with the Indian national flag on the shoulder) under cover of prospecting for lunar platinum to advance green energy technologies for India's 1 billion plus people.
China? They have no platinum mines at all and expend $3 billion to $4 billion per year in hard currency to buy platinum. Chinese governmental investment in a private sector multi-national lunar platinum consortium seems an obvious play to me. If lunar platinum comes on-line, China merely re-directs its current foreign exchange now spent on buying PGM from South Africa.
Platinum and Chinese & Indian national prestige (and tourism) can go hand-in-hand, if a private sector company were to position itself to offer flights.Posted by Bill White at February 28, 2006 03:21 PM
Suppose that by 2010 China is spending $6 billion per year to import platinum (not implausible given $3-4 billion 2005 levels) then a $50 billion investment to extract lunar platinum and (perhaps) lower the price of terrestrial platinum and reduce the outflow of hard currency to South Africa is well within the range of reasonable rates of return.
A $6 billion annual revenue stream versus a $50 billion upfront investment? Not laughably insane even if its not a sure thing.
And remember the fringe benefits, like getting boots on the ground in the context of future property rights disputes and international prestige. Part of that $50 billion can be allocated to these other purposes.
Kurt: “An economic study using the space elevator is in order.”
Of course space elevators assume very high strength CNT, something that would make a huge difference to competitive technologies. But basically the drymass to payload mass flow rate of space elevators does not add up economically until one advances to very high speed maglev climbers. A space elevator that masses 100 times the payload and takes two weeks to climb compares very poorly to a rocket system that masses four times the payload and flies a couple of times a day. And the drymass is where the dominate costs are.
Finding a way of integrating a maglev system that does not add too much additional mass to the elevator may take time. More time I would expect than sub $10/kg very high flight rate rocket plus rotovator systems which are possible with existing materials and have an easier evolutionary path.
Mining copper off planet is rather silly, when the ocean floors have about a trillion tons of magnese nodules that contain about 1% Cu.
Er, 'manganese'Posted by Paul Dietz at February 28, 2006 06:12 PM
Ultimately, in my opinion, there is very little "out there" worth bringing "back here" except perhaps some platinum, to a very limited extent. Global platinum production currently less than $10 billion per year, a tiny market to be sure.
Settlement needs to be the reason for settlement.
The ability to shape the future distant centuries from now and to assure that folks who share our values and ideals (to the extent possible) shape the values and ideals of humanity as it spreads throughout the solar system. That is the only long term sustainable "why" in my opinion.
Of course, there's always the off chance that somebody will discover that something valuable enough (like CNT itself) can be mass-produced easily in persistent zero-g.
On rockets vs. elevators... I see a need for both. Rockets get things there fast, work today, and will continue to get cheaper as things like CNT evolve. The same CNT that goes into the elevator can go into a rocket.
Where I really see a place for the elevator is for "fragile" cargo. If you had a choice (be honest), would you rather go to LEO in an hour at high-g, or to GEO over the course of a week in comfort, with gravity slowly decreasing until you reach GEO? Oh, and your escape profiles are for much of the trip based on low-velocity descent with no real heating and parachutes. By the time you reach velocities sufficient to cause a traditional re-entry, you're probably high enough to use emergency RCS to stabilize into a temporary orbit and wait for help.
Now, think of what luxuries that also gives you in other cargo, now that it doesn't have to withstand launch forces and has a couple 9s of surivability.
For some time, I expect "soft" cargos to be the real market advantage of elevators. In the long run, there will probably be enough elevators to force many (but never all) rockets out of the atmosphere, where they will continue to evolve. After all, there will never be an elevator always where you need one.
Elevators and rotovator tethers are equatorial solutions, as I recall. Get a few dozen elevators going from locations on the equatorto GEO and a very large number of rotovator tethers in between orbiting at zero degrees of inclination and the traffic danger of stuff orbiting at higher inclinations becomes quite severe.
Bottom line? Singapore. Invest in Singapore.Posted by Bill White at February 28, 2006 09:12 PM
I think that PGM mining is going to cost less than $50 billion to implement. You don't try for the whole enchalada at once. This is especially the case if Reiner Gamma works out as a resource site.
The South African government recently said that for all intents and purposes the best PGM ore in the Merensky Reef has been mined out and their estimation of reserves (26 million kg) is 1/3 what the USGS says is there. I think that SA is closer to the truth than the USGS.
in my opinion, there is very little "out there" worth bringing "back here" except perhaps some platinum, to a very limited extent.
Look up the annual demand for the _really_ expensive metals and you will find it is also measured in grams.Posted by Sam Dinkin at March 1, 2006 08:01 AM
Elevators and rotovator tethers are equatorial solutions, as I recall.
They're both most efficient as equatorial solutions, but rotovator orbits can be slightly inclined (you have to get a payload to high altitude to connect it to the tether, so you might as well give it a little relative velocity too) and elevators can be connected off the equator (it ends up going up at a slight angle and requiring a slightly higher elevator-to-payload mass ratio, but the angle might help a climber get traction and the mass ratio was going to be big anyway).
I'd say you want them to be slightly off-equator just to avoid equatorial satellites. Intersecting an inclined satellite orbit is something that will rarely happen while the satellite is there, and an active control system (lift this payload a little faster, lift that one a little slower) can turn those predicted hits into misses - but an exactly equatorial tether would intersect every exactly equatorial satellite as often as every 100 minutes.Posted by Roy Stogner at March 1, 2006 08:31 AM
I'd say you want them to be slightly off-equator just to avoid equatorial satellites.
I agree. Note that Singapore is 1° 17′ 0″ N which is 137 km north of the equator. ;-)
Many dozens of rotovators (or more) zipping around at 28 degrees of inclination would give space traffic control fits, in my opinionPosted by Bill White at March 1, 2006 09:12 AM
That's partly why I'd rather see anything high-velocity like a tether out past GEO, say at L-points.
A draft of an critical economic study of the space elevator can be found here.
I've seen a couple comments that are down on asteroid mining for platinum, but I remain upbeat. If platinum's price could drop as a function of supply, we'd find all sorts of uses for it. Notably , platinum is used as a catalyst in high end battery technology.
The world needs better batteries. If we could double or triple the world's supply of platinum, we'd lower the cost to make 'em - and still turn a profit mining an asteroid just in platinum alone....Posted by Mike Taht at March 22, 2006 05:57 PM
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