free html hit counter Peak Oil Debunked: 251. SPACE: UNREALISTIC DREAM OR ECONOMIC OPPORTUNITY?

Tuesday, February 28, 2006

251. SPACE: UNREALISTIC DREAM OR ECONOMIC OPPORTUNITY?

We've previously covered the possibilities of strong economic growth in the near future through exploiting space, emphasising the point that space may be a large part of what will allow economic prosperity post peak oil.

Many in the peak oil community naturally still reject any notion of space providing for a bright future. After all, Apollo was over 30 years ago and we still don't have moon bases, lately we have barely managed the maintain manned space flight, we don't have any solar powered satellites meeting our energy needs, and we don't see massive lobbying and investment into the space business, right? So how can this space stuff be anything but a dream?

At least this seems to be the line of thinking for many people, and certainly an aspect of the doomer mentality regarding space. But if space is going to be an economic boom, then perhaps it would be prudent to take a look at what economists and entrepreneurs think about the future of the space business. These are the people that will make it happen after all.

Over the past several days an enlightening series about space has been posted on CNNMoney.com, written for Business 2.0 magazine. The intro page can be found here, which contains several links to relevant sub topics.

I've selected a few quotes from the articles:

"Profits set to soar in outer space
Prepare for liftoff: The space business may be the most incredible new opportunity of your lifetime.
"

Worldwide government spending on space is soaring to $50 billion a year, a 25 percent jump over 2000. NASA represents only $16 billion of that total, but during the next 20 years, the U.S. space agency is likely to sign contracts totaling as much as $400 billion [...]

In 1998, private-sector spending on space applications began to exceed government spending, and the gap is widening. [...]

All have the potential to generate astronomical returns during the next decade.

-----
Building infrastructure is the first step, and here historical analogies abound. The federal government is poised to begin contracting with the private sector to deliver cargo into orbit, a trend that could nurture a market for civilian spaceflight in much the same way that airmail contracts from the Post Office spurred the development of civil aviation a century ago. Prize money -- the incentive that launched Charles Lindbergh -- is now being offered for everything from building a machine to extract oxygen from lunar soil ($250,000) to building an aircraft capable of delivering tourists to orbit by 2010 ($50 million).

-----
The final frontier has been mapped out, and it's almost time to open the business district. In the next 15 years, we could see zero-G R&D labs for Big Pharma and tech companies, solar-power satellites saving Earth from fossil-fuel addiction, and sports arenas hosting events that make the X Games look tame.

[...]

It seems fanciful, but the profits will be very real--as much as $115 billion in the next 15 years. And if you want to cash in earlier, one tycoon is offering $50 million to anyone who can deliver tourists to his soon-to-launch orbital hotel.

[...]

For entrepreneurial ideas, the sky is no longer the limit.
Of course these are just stupid economists who have false beliefs in infinite growth paradigms and have no understanding of the affects of depleting resources on world economies. Of course most of the people investing big dollars in these ventures are among the most successful business people in the world, but hey, what do they know…
-- by Omnitir

5 Comments:

At Wednesday, March 1, 2006 at 12:51:00 PM PST, Blogger Roland said...

Great post Omnitir. It really seems like space is approaching a second renaissance. I see the early space program as more akin to 19th-century ballooning than to powered flight. Now that the private sector is looking for ultra-cheap, non-rocket-powered ways of getting up there it's like the early days of powered flight. The flight of SpaceShipOne, 100 years after the Wright Flyer, was just as significant. Meanwhile robots are fantastic as ever and we're going back to the moon and mars. It's all happening.

 
At Wednesday, March 1, 2006 at 8:29:00 PM PST, Blogger Omnitir said...

Thanks Roland. Between the push to develop space, robotics and nanotech, I think we could be in for some very interesting developments in the decades ahead.

Also, regarding the development of new techs for getting into space, it’s worth noting that as well as all the new concepts actively being explored, there are also considerable improvements and cost reductions being made in conventional chemical rocketry, allowing an ever growing investment base in space.

The Business 2.0 article describes a number of private enterprises with the potential to dwarf any economical achievement in history. We currently think of success stories along the lines of perhaps Microsoft or Google, or perhaps the media giants for example (who all started small but visionary), but imagine the possible future success stories of enterprises that, against all apparent conventional wisdom, invest big-time in space, and end up getting profit returns many orders of magnitude greater then previously thought possible – made especially impressive considering that these unprecedented profits come in a time when conventional wisdom suggests that economies should be collapsing through resource depletion, not booming through new expansion.

I’m particularly impressed with the notion of capturing a near Earth asteroid. Imagine raising around $2 Billion for some seemingly ridiculous asteroid mission, only to shock the world by succeeding and returning to Earth materials worth $14 Trillion. That’s some profit margin!

 
At Wednesday, March 1, 2006 at 10:29:00 PM PST, Blogger Roland said...

Of course, chemical rockets are making huge strides too, and I'm sure we'll keep using them for quite a while. The great thing is how space technologies of all sorts are getting cheaper, and you're absolutely right that the real space age will begin when it's widely feasible to achieve profits in space (like the first airlines), unlike in the past when going to space was an interesting but impractical exercise (like ballooning).

 
At Thursday, March 2, 2006 at 9:51:00 PM PST, Blogger DC said...

It's clear that NASA doesn't have the vision, will or ability to lead the development of even LEO. I have always been dismayed with their fixation on the Shuttle and ISS programs at the expense of better investment and science opportunities. As a former employee, it has frustrated and jaded me to no end.

I know the point of this entry was to emphasis the private opportunities in space development. However, I can't help but wonder how much further along we would have been if:

1) Politics hadn't been the driver for the push to the Moon. We spent so much effort and money to get there, yet we had no idea what to do upon arrival. Digging for rocks and joy rides on buggies does not a good vision make.

2) NASA and the Air Force hadn't become bedfellows on the Shuttle Program in order to avoid Nixon's fiscal wrath. The resulting orbiter was a perversion of the original design since it had to accomodate the miliary's payload and polar orbit requirements. As a result, the orbiter was reusable in name only and NASA scrambled for some kind of financial return by forcing it to be the only commercial payload platform (until the Challenger accident). Ask the Hubble designers how they felt downsizing their mirror in order to satisfy this mandate. Ask any commercial company how they felt dropping $10k per lb of payload?

3) The ISS had never been built. It's development is a textbook example of irrational behavior over sunk costs. A combination of shuttle and station were what NASA hoped to develop post-Apollo. They were ultimately forced to choose one over the other. Naturally, they chose the shuttle and figured to build the ISS shortly afterwards. It didn't work out that way. The shuttle was a financial and technical disappointment. Despite these facts, the old gaurd felt the need to defend their original plan.

Oh well. No use crying over spilt milk. Onward and upward!

 
At Friday, March 3, 2006 at 5:11:00 PM PST, Blogger Omnitir said...

Interesting comments dc.

As you say, it’s hard not to contemplate what could have been if a few key aspects of space development and exploration unfolded differently. If the purpose of Apollo was to establish some level of permanent infrastructure on the moon things might be very different now. But I believe the most important thing that space needs is privatisation, and this is where I think NASA has ultimately failed.

What is NASA, idealistically, supposed to be about? I would argue exploring space. Yet exploration has been on the back burner for a very long time, because NASA is forced to do what should be the job of the private sector. The shuttle and ISS seem to be the kind of projects best suited to commercial operators. Hauling cargo, construction, repair jobs etc., these are things that should be met by private enterprise, not by an agency supposedly with a mandate to explore space.

I think the biggest mistake was not focusing on developing private enterprise. With adequate government support and information sharing, LEO could have been developed almost entirely by private enterprise, which as well as strengthening the economy, would have freed NASA to pursue its original mandate: the exploration of space. Who know, we could have sent people to Mars by now if NASA was just focused on exploration.

Thankfully though the private sector is now growing and hopefully space will now be pursued in a more sustainable manner.

 

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