Space Based Economy Valuation, Analysis, and Refinement

 

In Ref. 1 we took an initial look at the issues involved in generating a flourishing space economy, postulating that opportunities developed at the interface between existing projects, to provide common resources and services. We postulated that by combining the business plans of two or more well-chosen "space commercialization" concepts, the market projections of both the concepts could be greatly improved, their costs and risks slashed, and hence their return on investment improved, sometimes by large enough factors to make them attractive. A 4-level evolution shown in Figure 1, from Ref. 2, was envisaged, starting with today's largely isolated major projects at Level One. Level One projects can be designed as Missions. Level Two involves Interactive Services such as the ISS, in-space attachment of re-boost packages, orbit transfer vehicles and common launchers. In Level 3, these in-space resources enable and create demand for enterprises that extract Extra-Terrestrial Resources, such as lunar mining and lunar oxygen. In Level 4, a host of smaller Derivative Enterprises caters to niches providing common services, leading to a full-scale space based economy.

 

Text Box:  

Figure 1: 4-level Evolution of Space Economy. Summarized from Ref. 2
This paper begins the process of laying out a sequence in which such a space based economy might grow, focusing on Level Two - Interactive Services. The process depends on two key assumptions which derive from previous work[i]. The first is that there is an acceptable level of certainty that all business elements in this process will start operation on a common timetable. The second is that competition and mutual interaction will keep reducing costs over time, while allowing windows of attractive profitability and market security. These assumptions enable synchronization and scheduling of market demand, price reductions, and technical feasibility. Implicit in these assumptions is the presence of a multinational / global entity[ii] organized and empowered to enable and sustain this progression through planning, coordination, and some backing to obtain capital at sustainable costs.

 

Forecasting business fortunes in space is no more accurate than forecasting the performance of individual stocks. It is even less so, because of the large differences, sometimes artificial, in the known costs of every element involved, and in technical options.  Many steps that might be obvious in most other fields of venture are not "done" or feasible in the space enterprise, for complex reasons that may or may not disappear suddenly. Thus the problem formulation for this paper includes the following caveats: ---

- The numbers used are the best that we can find; however, we have preferred simplicity to precision and thus avoided, for instance, complex orbital and financial calculations that do not in our view, provide significant gains in accuracy of prediction.

- Of the myriad factors that influence the profitability of an enterprise, we have tried to select and focus on those, which are of first-order significance - rudimentary and special to the enterprise.

- No particular company is envisaged; rather, the economy is developed in terms of general business parameters facing any company in a general area such as in-space refueling or lunar metal extraction, within the framework of a space economy with some synergy and organization. 

- The detailed exploration of opportunities and avenues within the framework is the province of entrepreneurs and specialists on the particular technologies.

- A framework, however, has been seen to be essential for all to move ahead, and this is what we try to present.

- To address the unreliability of the numbers, we posted the business cases as they develop, on this Internet site, so that comments from those who know better numbers, might improve the accuracy of the models. The problem being considered in this paper is how to quantify the viability of the first steps that are essential to the subsequent development, and then to show that these steps will lead to tangible benefits in the short term, as applied to the case of a well-known objective of the space enterprise - reducing the cost of access to Geostationary Earth Orbit (GEO).

 

 

Space 2006 Paper

 

Space Business Analysis

 

Reboost Package

 

Fuel Tanker

 

Reusable Upper Stage OTV

 

External Tank Fuel Station

 

 

Please email us with your suggestions, insight, and questions about our analysis at space.economy@gmail.com

 

 



[i] Komerath, N.M., Wanis, S.S., "Global Cooperation in an Age of Security Concerns". AIAA Paper 05-6638, Space 2005, Long Beach, CA, September 2005.

[ii] Narayanan Komerath, James Nally, Zilin Tang, "Policy Model for Space Economy Infrastructure". Paper IAC2005-D3-1.08, 54th International Astronautical Congress, Fukuoka, Japan, October 2005.