Some More Thoughts About Lunar Markets
As several commenters and blogospheric critics have mentioned, the odds of actually getting NASA to change its course from the current ESAS moondoggle to something more sustainable, affordable, and which helped catalyze commercial lunar transportation are well...rather small. Even with such low odds of success, the sheer size of the potential payoff if we could convince NASA to change its mind made putting at least some time and effort into pursuing that avenue worthwhile. However, while I still intend to continue tilting at that windmill from time-to-time, I am much more interested in finding commercial approaches to openning up cis-lunar space for commerce and eventually settlement.
As Thoreau once said, it's ok to have castles in the air, so long as you build foundations up from the ground to reach them. I think that the goal of economically thriving off-world settlements is a realistic one, but one that requires a lot of foundation work to make it possible. Before you can have off-world settlements, you have to have an economically valid reason for having them there. In other words, you need to develop space markets, and not just any space markets, but more importantly space markets that actually benefit from having people there.
I'm not going to try and write a treatise on all the potential space markets here, but I did want to give a couple thoughts about a few of the more promising ideas out there.
Tourism
In addition to interest in suborbital and orbital tourism, there have also been some groups looking even farther ahead to lunar tourism. Groups like both CSI and Space Adventures have been trying to market translunar spaceflights, and others have suggested eventually marketting lunar landing expeditions.
Private lunar expeditions have some real things going for it compared to many other lunar markets. The biggest one being that private lunar expeditions require a whole lot less technical development and research to get to market than many other lunar markets. Almost all of the technical development required before you can do a private lunar expedition is the transportation hardware to get there. Compare this to the amount of research and development needed to make a lunar mining project work, and you can see the appeal.
We don't know if there is really platinum in them thar craters, if there is platinum, if it can be profitably extracted and shipped back to earth. We don't know if anyone will ever find a way to use Helium-3 in a reactor. We don't know if we can make lunar ISRU work well enough to profitably sell propellants to other ventures. But we do know that if you can offer a low enough price, there are people who want to go to the moon. As Rick Tumlinson and others have pointed out, the "cargo" for space tourism already exists, and is "self-loading, inexpensive, and is produced by cheap manual labor."
The big problem with current plans for lunar tourism is that the going price of $100M for a translunar flight isn't attracting any interest, and probably never will. The amount of people who have could afford a $100M lunar vacation without breaking their bank is very limited indeed. If you can drop the price however, the pool of people with the required amount of wealth goes up rapidly.
I think that if you could get the price per seat for a translunar trip down to the $20-30M range, you might be able to get at least as many passengers as we currently see for ISS trips. But until you can get the prices down into at least that range, I doubt you'll see much interest at all, and in order to see large numbers of flights, you really want to get it down in the $1-5M per seat range. Translunar flybys or lunar landing expeditions are a lot more exotic adventures than just going to ISS, but there's only so much that people can afford for personal spaceflight.
The problem is that actually getting the costs down low enough to deliver that kind of a price is going to be a real challenge. I have some ideas for how to lower the costs that far, but they're only partially baked, and will have to wait for a later post.
Foreign Astronaut Corps
Another idea floated by Bigelow for his Sundancer module was augmenting the demand for personal spaceflight by also trying to encourage other countries to form their own astronaut corps. There is at least a little precendence for this. South Korea for instance just signed a deal with Russia to fly their first astronaut sometime in 2008. Malaysia is also starting an astronaut corps. At a price point of around $10M, there are lots of countries that could afford a small astronaut corps that would otherwise have no real chance of doing much in space. So, there might be something to this idea after all.
There is a difference though between the personal spaceflight market and the foreign astronaut corps market. While some governments can get away with sending a few "representatives" on very expensive pleasure-trips, most will have to find a way of justifying the expenditure. My guess from past experience is that these spaceflight participants will be sold as being "research astronauts". Basically, they will be doing at least some level of research, development or technology testing, not just enjoying the ride.
There might be an equivalent market for flying lunar scientists from other countries to the Moon. Heck, NASA has suggested as much at their big briefing a week or two ago on the Moon base idea. If there actually are any countries interested in flying astronauts to a future NASA lunar base, there might be some that would be interested in flying sooner, and at much lower costs. Some countries might want to follow Canada's example, and instead of focusing on the transportation side of things, finding some important piece of technology that they can become the "go-to-guys" for. For instance, maybe Japan or Canada would be interested in buying a couple of early seats (and/or cargo space) on private lunar expeditions so that they could develop and debug robotic lunar rovers to sell to other countries or better yet, companies that want to do stuff on the moon. Maybe some country will decide to invest money early on into debugging ISRU LOX plants, which they could then build for other entities trying to do lunar exploration...I don't know, but there may be some merit to this.
One problem with this is that so far, most governments have preferred a "no-money-crosses-borders" approach to funding international space projects. Ie each country chips in some part of the hardware, and in return gets some portion of the access. While this isn't ideal, it's also not completely unworkable. For instance, if Russia wanted to trade a Proton launch full of fuel in exchange for one of the seats on a mission, it might make some sense.
This is one of those topics that is new enough that it hasn't been as thoroughly explored, and could probably use a lot more discussion. There are a lot of foreign governments, and they can afford to pay more than individuals can, so they might end up being an important part of early commercial lunar development. But the question is, how? How do you structure things and go about them in such a way to get the most commercial benefit out of international cooperation? I'm really not sure.
PGMs and Other Lunar Mining Operations
This one has also gotten a lot of recent attention. The problem is, is that lunar platinum mining, even if it can be eventually done profitably, probably doesn't make much sense as an initial lunar business. The problem is that in addition to needing a way to get there, you also need to find out if there are any extractable concentrations, where they are, and then you have to develop and debug equipment to do so, and finally start running humanity's first off-world mining operation. Large-scale industrial/mining operations in the lunar environment is something that is going to require a lot of iterations to get right, which implies low-cost and frequent access to the lunar surface. The whole idea that we can just design robotic mining hardware right now and get it right the first or second try is hubris.
So, lunar mining is likely going to be a follow-on market to personal lunar expeditions and flying foreign astronauts. With something as speculative as lunar PGM mining, not having to also develop the transportation hardware before you can even start on the actual mining stuff will make business cases a lot easier to close. Still not easy, but easier.
ISRU/LUNOX
This is a market that only makes sense in combination with other lunar markets. The much lower transportation costs enabled by ISRU will make it easier to provide the price points needed to get high levels of lunar space tourism going, while also being a real neccessity for any sort of large-scale mining or industrial work on the moon. The nice thing about selling propellants is that your business isn't intimately tied to any specific lunar market. Some of the best business people during the California Gold Rush were the ones selling food and tools to the guys trying to strike it rich. Selling propellants may end up being similar. Of all the speculative lunar markets there might be, even if 80% of them fail, it doesn't matter as much to the guy selling them LOX, so long as somebody succeeds.
Concluding Thoughts
Anyhow, those were just a few of my thoughts. As I see it, the only two potential markets that really make sense in the near-term involve flying people--either wealthy individuals, or foreign astronauts. Both of those imply meeting price points in the ~$20-40M range for lunar transportation, with lower prices being even better. Both of those could also provide for a decent initial flight rate, and lower the bar for future more industrial/traditional lunar ventures.
As Thoreau once said, it's ok to have castles in the air, so long as you build foundations up from the ground to reach them. I think that the goal of economically thriving off-world settlements is a realistic one, but one that requires a lot of foundation work to make it possible. Before you can have off-world settlements, you have to have an economically valid reason for having them there. In other words, you need to develop space markets, and not just any space markets, but more importantly space markets that actually benefit from having people there.
I'm not going to try and write a treatise on all the potential space markets here, but I did want to give a couple thoughts about a few of the more promising ideas out there.
Tourism
In addition to interest in suborbital and orbital tourism, there have also been some groups looking even farther ahead to lunar tourism. Groups like both CSI and Space Adventures have been trying to market translunar spaceflights, and others have suggested eventually marketting lunar landing expeditions.
Private lunar expeditions have some real things going for it compared to many other lunar markets. The biggest one being that private lunar expeditions require a whole lot less technical development and research to get to market than many other lunar markets. Almost all of the technical development required before you can do a private lunar expedition is the transportation hardware to get there. Compare this to the amount of research and development needed to make a lunar mining project work, and you can see the appeal.
We don't know if there is really platinum in them thar craters, if there is platinum, if it can be profitably extracted and shipped back to earth. We don't know if anyone will ever find a way to use Helium-3 in a reactor. We don't know if we can make lunar ISRU work well enough to profitably sell propellants to other ventures. But we do know that if you can offer a low enough price, there are people who want to go to the moon. As Rick Tumlinson and others have pointed out, the "cargo" for space tourism already exists, and is "self-loading, inexpensive, and is produced by cheap manual labor."
The big problem with current plans for lunar tourism is that the going price of $100M for a translunar flight isn't attracting any interest, and probably never will. The amount of people who have could afford a $100M lunar vacation without breaking their bank is very limited indeed. If you can drop the price however, the pool of people with the required amount of wealth goes up rapidly.
I think that if you could get the price per seat for a translunar trip down to the $20-30M range, you might be able to get at least as many passengers as we currently see for ISS trips. But until you can get the prices down into at least that range, I doubt you'll see much interest at all, and in order to see large numbers of flights, you really want to get it down in the $1-5M per seat range. Translunar flybys or lunar landing expeditions are a lot more exotic adventures than just going to ISS, but there's only so much that people can afford for personal spaceflight.
The problem is that actually getting the costs down low enough to deliver that kind of a price is going to be a real challenge. I have some ideas for how to lower the costs that far, but they're only partially baked, and will have to wait for a later post.
Foreign Astronaut Corps
Another idea floated by Bigelow for his Sundancer module was augmenting the demand for personal spaceflight by also trying to encourage other countries to form their own astronaut corps. There is at least a little precendence for this. South Korea for instance just signed a deal with Russia to fly their first astronaut sometime in 2008. Malaysia is also starting an astronaut corps. At a price point of around $10M, there are lots of countries that could afford a small astronaut corps that would otherwise have no real chance of doing much in space. So, there might be something to this idea after all.
There is a difference though between the personal spaceflight market and the foreign astronaut corps market. While some governments can get away with sending a few "representatives" on very expensive pleasure-trips, most will have to find a way of justifying the expenditure. My guess from past experience is that these spaceflight participants will be sold as being "research astronauts". Basically, they will be doing at least some level of research, development or technology testing, not just enjoying the ride.
There might be an equivalent market for flying lunar scientists from other countries to the Moon. Heck, NASA has suggested as much at their big briefing a week or two ago on the Moon base idea. If there actually are any countries interested in flying astronauts to a future NASA lunar base, there might be some that would be interested in flying sooner, and at much lower costs. Some countries might want to follow Canada's example, and instead of focusing on the transportation side of things, finding some important piece of technology that they can become the "go-to-guys" for. For instance, maybe Japan or Canada would be interested in buying a couple of early seats (and/or cargo space) on private lunar expeditions so that they could develop and debug robotic lunar rovers to sell to other countries or better yet, companies that want to do stuff on the moon. Maybe some country will decide to invest money early on into debugging ISRU LOX plants, which they could then build for other entities trying to do lunar exploration...I don't know, but there may be some merit to this.
One problem with this is that so far, most governments have preferred a "no-money-crosses-borders" approach to funding international space projects. Ie each country chips in some part of the hardware, and in return gets some portion of the access. While this isn't ideal, it's also not completely unworkable. For instance, if Russia wanted to trade a Proton launch full of fuel in exchange for one of the seats on a mission, it might make some sense.
This is one of those topics that is new enough that it hasn't been as thoroughly explored, and could probably use a lot more discussion. There are a lot of foreign governments, and they can afford to pay more than individuals can, so they might end up being an important part of early commercial lunar development. But the question is, how? How do you structure things and go about them in such a way to get the most commercial benefit out of international cooperation? I'm really not sure.
PGMs and Other Lunar Mining Operations
This one has also gotten a lot of recent attention. The problem is, is that lunar platinum mining, even if it can be eventually done profitably, probably doesn't make much sense as an initial lunar business. The problem is that in addition to needing a way to get there, you also need to find out if there are any extractable concentrations, where they are, and then you have to develop and debug equipment to do so, and finally start running humanity's first off-world mining operation. Large-scale industrial/mining operations in the lunar environment is something that is going to require a lot of iterations to get right, which implies low-cost and frequent access to the lunar surface. The whole idea that we can just design robotic mining hardware right now and get it right the first or second try is hubris.
So, lunar mining is likely going to be a follow-on market to personal lunar expeditions and flying foreign astronauts. With something as speculative as lunar PGM mining, not having to also develop the transportation hardware before you can even start on the actual mining stuff will make business cases a lot easier to close. Still not easy, but easier.
ISRU/LUNOX
This is a market that only makes sense in combination with other lunar markets. The much lower transportation costs enabled by ISRU will make it easier to provide the price points needed to get high levels of lunar space tourism going, while also being a real neccessity for any sort of large-scale mining or industrial work on the moon. The nice thing about selling propellants is that your business isn't intimately tied to any specific lunar market. Some of the best business people during the California Gold Rush were the ones selling food and tools to the guys trying to strike it rich. Selling propellants may end up being similar. Of all the speculative lunar markets there might be, even if 80% of them fail, it doesn't matter as much to the guy selling them LOX, so long as somebody succeeds.
Concluding Thoughts
Anyhow, those were just a few of my thoughts. As I see it, the only two potential markets that really make sense in the near-term involve flying people--either wealthy individuals, or foreign astronauts. Both of those imply meeting price points in the ~$20-40M range for lunar transportation, with lower prices being even better. Both of those could also provide for a decent initial flight rate, and lower the bar for future more industrial/traditional lunar ventures.
posted by Jon Goff at 11:25 AM
39 Comments:
I have a sneaking suspicion that the next moon landing, private or public, is going to be a bigger ratings catastrophe than Apollo 13 before the service module exploded.
The moon is a scientifically and economically worthless hellhole, which is we abandoned it four decades ago. Unless we stuff Paris Hilton in the capsule and neglect to fill the ascent tanks, (please,) no one is likely to care.
"We don't know if there is really platinum in them thar craters, if there is platinum, if it can be profitably extracted and shipped back to earth. We don't know if anyone will ever find a way to use Helium-3 in a reactor. We don't know if we can make lunar ISRU work well enough"
Exactly, and its a showstopper for any business plan. Too big unknowns. And thats what NACA-style agency should be hard at work on resolving. Get rid of these unknowns. Unfortunately, we only have NASA which wants to be a trucking company first and foremost.
The whole idea that we can just design robotic mining hardware right now and get it right the first or second try is hubris.
I am fairly confident that space people keep misunderestimating robots ;) And thats probably because they judge their capabilities based on current crop of space robots, like MERs.
Well, the fact is that technology used on MERs is so far behind of state of the art in robotics that it aint even funny.
The idea of universal robot that can perform basically any task that a suited astronaut could do is completely in realm of possibility today.
I recommend adding couple RSS feeds on robotics to your daily newsreel, like http://robotgossip.blogspot.com/ etc, i have some bookmarked on http://www.bloglines.com/public/kaidokert
I'm fairly confident that space people also misunderestimate the simplicity of operating mining equipment in harsh environments.
On earth even the toughest excavators need almost daily maintenance. Given the complexity of dealing with statically charged and highly abrasive regolith, you'd be lucky to measure the uptime of the first dozen generations of lunar mining equipment in hours.
On earth even the toughest excavators need almost daily maintenance
Huh ?? What particular brand of hardware from which century are you talking about ?
I know that in a coalmine nearby they are running russian equipment built around two decades back with updated electronics and drives from ABB and those things run for years on end before needing any fixes. And they HAVE to run because every minute of downtime means a fixed amount of production output (read : money ) lost.
Besides, just as you can design your hardware to be easily manufactured, to be minimum cost or to be ultra reliable, you can similary use design paradigm of being robotically maintainable and serviceable. I.e. we are pretty close to the point where you can have robots that are maintained by robots, if you design this right.
Why arent we doing this on earth yet ? Because human labor on earth is still comparatively cheap
Adrasteia,
I have a sneaking suspicion that the next moon landing, private or public, is going to be a bigger ratings catastrophe than Apollo 13 before the service module exploded.
I'm kind of skeptical about the whole entertainment angle myself. I had originally intended to include entertainment/sponsorship as one of the major categories, but decided to pull it. Now, that's not to say that there aren't some ways to do things such that you get a lot better viewing for at least the first landing. I even have an idea or two on that myself. But it's at best a one-shot deal, and it better not account for even a plurality of the necessary revenue for that first flight.
As it is, I think the incremental development approach is far superior anyway. And I'll get into that...in a later posting...
The moon is a scientifically and economically worthless hellhole, which is we abandoned it four decades ago.
We abandoned the moon four decades ago because NASA chose a transportation system that was so expensive (due to its design being driven by political and not economic forces) that there was no way a private company could close a business plan using it, and there wasn't science interesting enough at that cost to justify continuing. There are vast amounts of interesting scientific questions remaining about the moon, with dozens or hundreds of sites of interest worth exploring. There are even as I pointed out in this post some potentially interesting markets there too. The real key is developing them in the right way, and getting the transportation cheap enough, reliability enough, and frequent enough to enable them.
~Jon
Adrasteia, Kert,
I kind of side with Adrasteia here. Most people who've worked in very abrasive mining environments agree that designing robotics for doing so on the moon is going to be a challenging task that is going to take a lot of iterations to get right, and even then will probably be maintenance intensive. You're not going to get rid of needing some people on the moon to do that maintenance, and especially during the iteration and break-in period. Robotics are really interesting, but most of the really cool stuff is being done in labs that don't have environments even close to as harsh as the lunar surface. I'd rather plan for having the ability to have several good technicians there on-site to debug, maintain, and repair things, than to assume they won't be needed and find out that they will after all.
~Jon
Bill,
Do you see ANY private funding source that does not require NASA to lead the way and develop the infrastructure first?
Well, first off, let me clarify a tad. I think that entertainment money might be had in some quantity, but not in sufficient quantities to really close the business case by itself. I could be wrong. It's just that's the route that ASI took, and their Artemis Project never got anywhere.
As to your real question, yes I definitely think there is a commercial way, and I even have some ideas about what that way might be...patience grasshopper. ;-)
~Jon
The problem with Jon's premise, that lunar commercial enterprises are dependent on NASA "seeing the light" and choosing his favorite, pet transportation system is that *no* transportation system chosen and developed by a government agency is likely to be cost effective enough to support those kind of ventures. What is needed is a lunar COTS program where private businesses compete to build space craft capable of reaching a lunar outpost that is already extant. There is no way around that fact.
Mark,
The problem with Jon's premise, that lunar commercial enterprises are dependent on NASA "seeing the light" and choosing his favorite, pet transportation system
Ah, I was wondering when my good friend from planet Strawman would come back for a visit. Seriously Mark, how the heck did you possibly come to the conclusion that my premis was that "lunar commercial enterprises are dependent on NASA" doing anything? My stance all along has always been that NASA choosing a more commercial approach is a catalyst to commercial lunar enterprises, not a prerequisite. NASA can help, and both NASA and commercial enterprise would benefit greatly from such an approach, but even if NASA doesn't ever get a clue, lunar commerce will still go on. It'll just take longer.
I fully believe that there are several free-market routes to commercial lunar transportation, even without NASA as a customer. In my next post I'll go into one of my concepts I'm working on. It doesn't require anyone at NASA to see the light. But it would definitely benefit from an extra customer if they ever do see the light.
As for your Lunar COTS idea, I think that telling the private sector "Hey, in 18 or 20 or however many years, we're going to have this lunar base and we'll want to buy some transportation from you at that point, but screw you until then" is hardly what the best way to foster lunar commercial enterprises. If lunar COTS makes sense then, why not find ways to encourage such capabilities in the near term, when NASA can actually get some benefit out of it? Why insist on locking in the worst possible transportation costs and then coming back to try and get private enterprise to salvage things? ISS would've been a lot better off had commercial transportation been encouraged and fostered from the beginning instead of being some sort of afterthought bailout. While COTS is a good idea, COTS 10 years ago would've been even better. Why are you so giddy to repeat the same mistakes we've made in the past?
~Jon
Jon, there is no commercial market on the Moon right now that would justify a COTS program and there will not be until there is a lunar base. I'm sorry that you don't seem to get it, but it is true nevertheless. No venture capitalist is going to invest money into a lunar shuttle based solely on a lunar base that will become reality in ten or fifteen years or on commercial markets that are likely decades in the future.
The sad truth of the matter is that NASA is going to have to get back to the Moon in the old, boring, tried and true way before commercial players can follow. Dream all you want about "commercial solutions" that do not exist, but that's the reality.
Almost no operation in space, return to the moon or otherwise, is going to be commercially viable until access to Earth orbit is addressed in terms of affordable, frequent, and reliable.
Weather and communication satellites are an exception on account of high return for the mass involved. Even they would benefit from improved access to orbit.
Jon Goff said: "As it is, I think the incremental development approach is far superior anyway. And I'll get into that...in a later posting...".
As a potential future customer I'm so happy you said that as by the time I reached those lines I was getting a bit distraught :)
Get payloads of all kinds and sizes in a continuously more affordable way to LEO, GTO, GEO, and EML1 and the customers (both individuals, organisations, and governments) will gradually appear on their own.
That said I think there will be an onrush of customers when EML1 is reached somewhat affordably; a lot of small and medium-sized business cases make sense at that point. With those as an economic foundation lunar and martian destinations become much less "castles in the air".
To Peter and the Hermit
Where will low cost LEO access come from? Without a business case who will invest to achieve that?
I noticed here that no one is speaking about potential lunar agriculture. The experiements from apollo showed that earth plants absorbed alot of the minerals from the lunar soil. I realize that water use would be a very big factor, however can you imagine the market for lunar grown "moonshine" not to mention its use as a rocket fuel!
Space tourism cargo may be self loading. Worthy cargo of that sort is not cheap, nor produced with unskilled labor. Planting seeds may be cheap and unskilled, raising good crops requires skill, investment, and constant attention. This applies to both the corn, and the corn eaters.
One remote possibility that exists for boosting both the forein astronaut corps and the commercial tourists is to provide an apparently compelling reason for payload specialists. National weather, research or com sats could be mass produced requiring specific handling on deployment by the specific national entities. Even if this hands on requirement is a smokescreen, it can help pacify the taxpayers or stockholders paying the bill. Even dictatorships must pay some attention to public opinion.
One deployment technique of particular interest in this case is the lunar flyby to geo orbit. I understant it saves a minor amount of propellant compared to a direct geo insertion. This can be used as a sales technique to put taxpayer funded tourists on a lunar flyby.
If they can also be convinced that dead geo sats should be crashed on the moon to clear the spacelanes, then there is the two flyby mission. One to recon delivering the bird. Second to drop the dead one after deploying the new.
Some of this new frontier will require innovative sales techniques. Mine is likely not it, but maybe it will trigger an idea that will work for someone.
Hey Mark,
a question for you - if Congress were to put up 50 billion as a prize for a private moonbase (I know they almost certainly won't, but for the sake of arguement) - would it look exactly like what nasa is doing? Very similiar to Nasa? How close do you think they would be?
Bill,
Also (IMHO) NewSpace should adjust their priorities to spend a little more time looking for profitable business cases and a little less time complaining that "if only NASA did what I said, we'd be spacefaring already"
Most NewSpace companies actually are. Most of the people tilting at NASA windmills are in the NewSpace media (such as myself), or working for NewSpace advocacy groups, such as SFF. At my day job, you don't see me wasting time worrying about what NASA is up to, I'm too busy trying to make our technology work so we can execute on our business plan. I just can't talk about that as much due to the proprietary nature of most business plans.
The blogosphere can sometimes give a distorted view of the world.
~Jon
Ferris - I don't think that a fifty billion dollar "Moon Prize" would work. It does not get around the problem of raising capital to do a private Moon mission from private markets. I cannot conceive of any venture capitalist who would shell out the billions it would take for a private entity to build a Moon base solely on the basis of a fifty billion dollar purse that Congress may or may not choose to appropriate. There are just too many less risky, even in space, ways to make money.
John,
The idea of combining lunar flyby tourism with GEO satellite delivery is interesting, but might end up being a lot more technically challenging than just a lunar flyby. Now, if the satellite itself were providing the GSO insertion burn...it might work, but you'd have to go with a smaller capsule, which raises ticket price...
Its an interesting idea though. Thanks!
~Jon
Mark,
Jon, there is no commercial market on the Moon right now that would justify a COTS program and there will not be until there is a lunar base. I'm sorry that you don't seem to get it, but it is true nevertheless. No venture capitalist is going to invest money into a lunar shuttle based solely on a lunar base that will become reality in ten or fifteen years or on commercial markets that are likely decades in the future.
You need to be careful when labeling your opinions as objective truth. Just because you can't see a way to do things commercially, or just because the method you would take to do it is infeasible, doesn't mean that someone else can't find a better way that would work. Going around arrogantly spouting off your personal opinion as objective fact in this manner comes dangerously close to setting yourself up for looking like the fool who said this:
"Professor Goddard does not know the relation between action and
reaction and the need to have something better than a vacuum against which to react. He seems to lack the basic knowledge ladled out daily in high schools." - 1921 New York Times editorial about Robert
Goddard's revolutionary rocket work.
or the one who said this:
“Flight by machines heavier than air is unpractical and insignificant, if not utterly impossible.” - Simon Newcomb
While I'll admit that I don't know for sure, I really do think that there are real lunar markets (and more importantly intermediate markets) that could be developed privately. They'll take time, and they won't be a direct straight-to-the-moon project, but I think that there are several ways of opening up the lunar market, even if NASA never builds its lunar base.
And you have to admit that that possibility (that NASA will never build the base) is a possibility.
Let me put it this way. If for some reason those "Evil Democrats" (TM) were to disband NASA, are you saying that private enterprise would never get there?
~Jon
Peter,
Almost no operation in space, return to the moon or otherwise, is going to be commercially viable until access to Earth orbit is addressed in terms of affordable, frequent, and reliable.
I know that that is a NewSpace article of faith, but I'm not 100% convinced. I do think that there are some potential markets that become a lot more substantial and robust if orbital launch costs go down, and some that can't even come into existance without such a decrease.
The problem with lower cost launches is that without demand to justify them, nobody will fund them. The problem needs to be worked from both ends to be solved. Attacking the launch costs side by iterative development evolving up from suborbital RLVs to orbital ones is only one side of the equation. The other side is developing space markets that even if anemic at current launch prices are at least marginally profitable, but who would obviously be more profitable as lower costs and higher flight rates become available.
I've got an idea for one such market, but things may be too crazy between work and Tiff being due this week for me to get to it any time soon.
~Jon
Jon - Comparing me to the New York Times is a low and very silly blow. Clearly the Times knew nothing about physics, as it was well understood even at the time the Times published its infamous article that what Goddard proposed was possible.
Commerce also has rules, just as rigorous as those of physics. The rick/reward ratio for a private Moon mission is just too high right now. If it were not, someone would be working on one. More than one someone, IMHO.
The burden of proof of those who talk airily of "commercial markets" on the Moon or "commercial solutions" to returning to the Moon lay with those who propose those things. If you think you can put together a commercial lunar mission *today*, especially without government help, then I invite you to do so. I will cheer any serious effort along those lines every step of the way. Of course, Burt Rutan doesn't think that a commercial Moon mission is possible right now. He's one person I tend to listen to when it comes to commercial space. Jim Benson is somewhat skeptical about lunar mining, like Helium 3, believing that transportation costs will never come down far enough. (I disagree with him, by the way, but again Benson is someone who bears listening to on the subject.)
Som please, cut the cute references to Goddard and the New York Times. If you want to proove me wrong, then you know how it can be done. I will not, however, hold my breath.
Mark
2 points
1 - Whether you like his New York Times comparisons or not, he raises a valid point - Do you believe that without Nasa, we'll never get a moon base?
2 - I know that no one would put money up based on a prize that might or might not happen. BUT, for the sake of arguement, lets assume they do! Your claim is that they can't raise the money - why? The key point in any business venture is profit and revenue streams - 50 billion is a clear revenue stream - why can't you use that payoff to leverage money from various financial companies/financial institutions? The newSpace companies, like Scaled Composites, XCOR, and others, aren't focused on doing much, if anything with Nasa, and yet they are able to leverage money against potential profit - That 50 billion, for the sake of argument, is real profit, already predetermined - not speculative.
If your arguement is that 50 billion isn't enough to break even - what would you consider a break even number?
The US government can make a $50 billion prize credible. They can, for example, create a trust fund which maintains the prize. There are precedents like Superfund or Social Security. There's also been plenty of discussion on the internet on how to structure the prize so that it's not just a winner takes all affair. I strongly doubt it'll happen (at least that it would be funded by public funds), but there's an opportunity to create something that would spur substantial useful activity.
ferris, there's still the risk of becoming an also-ran. If the money pays out only to the first one, then that increases the risk of failure for all contestants substantially.
Ferris - (1) Nope. Absent the United States, the Chinese will be the first to build a lunar base. Then private business, if they get to the Moon at all, will be there on the sufference of Beijing.
(2) Invalid question. It doesn't matter if the government promises to pay fifty billion or fifty times fifty billion, no venture capitalist in his or her right mind is going to shell out money to fund a private Moon base without some other market.
Now one could suppose is scenario in which President Hillary cancels VSE and the Chinese don't go either because of an internal collapse or some other unforseen reason. Absent some other state party going (India?)the cloest date I could guesstimate for a private Moon base would be about 2050, given the development of lunar markets and the decrease in cost of travel to the Moon improving the risk/reward ratio. But I find that scenario very unlikely.
Mark, you wrote:
Invalid question. It doesn't matter if the government promises to pay fifty billion or fifty times fifty billion, no venture capitalist in his or her right mind is going to shell out money to fund a private Moon base without some other market.
So hypothetically, if building a Moon base cost on the order of a few tens of billions, and if NASA is offering $2.5 trillion for that Moon base, then no one is going to shell out money for it because there's no private market for Moon bases? Even though the return on investment is around a factor of 50?
No, Karl, that is not what I am saying. No venture capitalist is going to consider a government prize of that magnitude as anything but a crap shoot, considering how politics works.
Let us say that President Bush offers a lunar base prize of fifty billion and--by some miricle--the new Democratic Congress actually appropriates the money and puts it into an escow account. Two years from now, Hillary Clinton or Barack Obama gets elected President and decides that pot of money would be more useful financing some new health care for the deserving poor scheme and gets Congress to close down the account and divert the money. If you are a venture capitalist who shelled out a couple of billion to some plucky group of entrepeneurs to win the Moon Prize, you are screwed, tatooed, and served up with an apple in your mouth, because that money is now gone.
Mark,
So your point is that we should not depend on the govt to do anything because they are so unreliable?
Pete - I agree with you, at least in terms of needing to talk about space settlement and space colonization. Any time someone from the manned spaceflight community is talking to someone outside, we need to be talking about colonization - thats why I am pissed at Nasa's proposal - a 4-6 person base is pathetic.
karl - there are ways to deal with also-rans - the obvious one being to set up money for first and 2nd prize. There are others.
mark - 2 things
First, your putting to much politics into the equations. Both Karl and I are assuming that the money will be there. Yes, I know that politics enters into the scheme of things, making it difficult, but this is one way to develop a market.
Also, the second thing mark - I save special comment for you. You claim Jon did a cheap shot with his New York times comparison (which frankly was legit becuase your claiming fact, when at this point, its an opinion), and yet, you engage in it yourself, by implying (and yes, your comment imply) that only Democrats will screw the space program, when Republicans have screwed it as well.
Anonymous said:
"To Peter and the Hermit
Where will low cost LEO access come from? Without a business case who will invest to achieve that?"
In my opinon there is, with the emergence of NewSpace companies, already sufficient competition within established and emerging markets to drive this development.
As an example if Masten manages to supply what they described here: http://www.masten-space.com/products.html
and at a price level for EML1 + some minimal delta v at roughly 20-40 times the price given for LEO ("5 kg Custom Payload - $1250" taken from their front page) then I would be able to close the business case for at least three or four of the precursory endeavours I'm chiseling away at (one of which is an instant earner and would require a lot more launches as demand increases). What is more I might not even need any external funding (although the money-earner one would be easy to fund) to do at least one of them at that kind of price level (and the same would apply to anyone else willing to sell a house or similar).
5 to 10 kg at such a prize ought to be enough for many small and medium size business plans (at least it's the case for the ones I work on), so that's why I chose it as an example.
All that said I don't think I will be among the first customers (simply because I think the access will be available before I am). I'm sure others are planning similar things and might even beat me to it. Thankfully the money-earner survives competition (any competition might even increase the market) :)
All of the above do not involve Luna nor human spaceflight. At least one of them would be of use on Luna and for human spaceflight, two (the money-earner and an additional somewhat similar one) could very well become a (teleoperated) lunar business operation if the market really takes off or perhaps even if it doesn't (it's too early to compare the pro and cons).
I should stop now before I give it all away ^_^
Pete said...
"I am sure I will still be saying this twenty years from now but the real market for space settlement is space settlement."
Couldn't agree more, however it won't take philantrophy (although that's welcome as well of course). It might also happen a lot faster than we think since Bigelow has already started the intial "space real estate creation".
I hope you will be saying it because it has become an investement maxim ;)
Redneck - I'm suggesting that no venture capitalist would trust a government to fullfill an obligation to the extent of better two or so billion dollars that it would.
Ferris - Yes, let's ignore politics. And while we're at it, let's ignore the laws of physics.
I have identified a few more potential lunar markets here.
Mark you wrote:
Let us say that President Bush offers a lunar base prize of fifty billion and--by some miricle--the new Democratic Congress actually appropriates the money and puts it into an escow account. Two years from now, Hillary Clinton or Barack Obama gets elected President and decides that pot of money would be more useful financing some new health care for the deserving poor scheme and gets Congress to close down the account and divert the money. If you are a venture capitalist who shelled out a couple of billion to some plucky group of entrepeneurs to win the Moon Prize, you are screwed, tatooed, and served up with an apple in your mouth, because that money is now gone.
If that "escrow account" is operated by a third party (ie, a Swiss bank) with no connection to the US government, then the looting scenario you describe becomes rather difficult to accomplish. Maybe the board of trustees could be stacked and money looted in some way. But there are a number of stable trusts in the billions of dollars. I don't see the impossibility of a government setting up a real trust in a way as to prevent looting by a future regime. It looks like a solved problem to me.
A relevant side issue is that the above trust structure is somewhat incompatible with the claim that you can get the money back if no one claims the prize. The trust would have to be set up to disolve in a period of time in order for that to be true.
Having said that, I don't see the political will for a prize trust. My take here has always been that if we're going to squander billions of dollars of public funds on manned space projects, then it would be better to fund prizes rather than launch vehicles that both operate at low launch frequency and which as in the case of Ares I aren't sufficiently better than commercial alternatives (the Atlas V Heavy or Delta IV Heavy) to justify the effort.
Tankmodeler,
You don't need ambitious private property laws to do a lot of things. Eg, just having exclusive mineral rights to a region would be sufficient to grab that high PGM meteorite or mine helium 3. There's some good history on how to do that. One reason to consider such action is that incrementally improving property rights is one possible pathway to full property rights. Mineral rights is by necessity an early property right.
Tankmodeler,
There's a lot of folks, myself included, who think that there is enough ambiguity written into the UN Treaties to go ahead and establish operations. The thinking is something like this:
-You cannot lay claim to a piece of ground. (Art. II)
-You can establish facilities there. (Art I)
-If you do so, no one can interfere with the operations of your base. (Art. III, VI, VII, IX) ("Peaceful use")
-You are entitled to the product of your space machines. (Art. VIII) (data is a product of space machines, oxygen can be a product of a regolith-processing space machine)
-You cannot make claim to area that you are not using or have not established as being legitimately part of your base's function. (Art. II)
-You have to allow visitors from other facilities, but they have to reciprocate. (Art. XII)
-If you abandon your facilities and stop making use of an area (probably demonstrated by evacuation for a certain period of time, or falure to renew registry), then you can't stop someone else from moving in and making use of that area. (Art. II) (or even the abandoned facilities. Salvage, baby!)
The problem is that no effective mechanism has been established to resolve torts. Gov'ts don't want to fight on behalf of their corporations in international courts. It's a pain in the neck, but it is exactly what is required for commercial American industry to get a foothold in space. Foreign governments would also have to devise mechanisms for representing corporate interests in international court.
Not having to pay some bozo for a piece of paper that says you have the right to be there is a huge leg up in my opinion, but it also drives a certain amount of first-come, first-served urgency. A big part of the fraud in real estate comes from deed transfer confusion. Change that around to where folks have to declare "I am X and I have facilities located at Y on celestial object Z". Make them include the comm code, and renewal for a small annual fee.
OOSA already has a registry of objects that have been declared as launched by the world's governments. I doubt anyone thinks that it is 'complete'. But of course the UN is a voluntary membership organization and it becomes therefore a reflection of the strengths/weaknesses of all of its members.
Remember, the treaties are about the exploration and USE of outer space. There are lots of ways to deal with the real estate issue. Arbitrarily imposing a burdensome English-history-based system on celestial objects might not be the best way to start off, and the OST doesn't necessarily say that we have to before space can be of use. What is needed is a place to resolve the torts that will inevitably arise, and a means of governments representing the interests of their national corporations and organizations in that forum.
Other than that, who needs your Deed? I'll race you there...
In my honest opinon introducing Earth control, administration and (possibly indirect) taxation for Luna or any other space object in the hope of attracting more private enterprice is shooting oneself in the foot.
I'd also like to add something (which might be glaringly obvious) to the nice post by murphydyne: if one uses the existing lunar landscape as shielding for sublunar facilities then said lunar landscape has become an integral part of your facilities.
So let us treat the moon treaty for what it is: a bygone agreement between the US and USSR not to lay claim to the entire moon by being first to land.
Hmm I find the argument that a company needs government legal guarantees of the sort being discussed here completely moot. Many (I'm tempted to say all as I can't think of any counterexamples) large mining companies on Earth that operate in unstable regions or regions without much of a legal infrastructure (or any other for that matter) know that paper is worthless without the force to uphold it, thus they make abundant use of mercenaries, "rebel army" alliances, etc. and do so with the slightest of legal backing (much less so than what can be construed from the moon treaty if one wishes to).
So I can't see mining rights/mineral rights/property rights as issues that holds anyone back at all. Isn't it a red herring born from a bit of frustration because we see the enormous opportunities and others seem not to?
And merry Christmas (or any other festivities as might apply) everybody - you all make this place one of the most fascinating and interesting places on the web :)
tankmodeler,
Instead of pleading to being a simple mechanical engineer, you should be thinking about International Space University. One of the things we covered was the Vienna Law of Treaties and how it affects the legality of treaties such as the 5 UN space treaties, which we all studied in depth.
I guess I have to disclose that I am not a lawyer nor an attorney, nor counsel. I am just a simple investment banker whose next degree (in my 40s, 50s is the doctorate) will be a law degree. Probably something that ties together my BA in Int'l Business & Economics with my Master of Space Studies and 15+ years in commercial and investment banking.
So my comments cannot be held to have legal authority or backing. I have discussed my particular view with space law folks like Berin Szoka, Wayne White and Virgiliu Pop. Some agree, others don't. It's all pretty ambiguous right now, and that means opportunity to set precedent. That's the kind of opportunity I see.
And all those greyfields just waiting to be put to good use.
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