America’s future success in space depends on restructuring our approach for financial sustainability. While NASA has contracted with the private sector for innovation and cost savings, it continues to use the same antiquated and constraining structure that was first developed for exploring space. This carries an opportunity cost that slows the private sector’s plans to harness space’s many viable materials and properties, compared to the pace it could attain with a more market-friendly approach. Such activities could help solve Earth’s most pressing problems and foster a space industry that sustains itself financially.
Many space-based activities have commercial potential. For example:
- tapping space-based clean energy sources
- mining asteroids for useful raw materials
- developing safe venues for scientific experiments
- upcycling/sequestering hazardous but valuable debris currently in space
- tapping sources of water already in space, to decouple into oxygen and hydrogen for
space fuels and oxidizers, and to provide radiation shielding mass
- using the low-gravity, low-temperature and other properties of space for many
activities, including manufacturing and research
These endeavors—as well as our current use of space for communication, navigation, defense, etc.—argue for a change in our approach to space from the current exploration paradigm to one of commercialization. Transportation infrastructure will create the environment for private players to develop space-based industries that use commerce to greatly increase the quality of life and decrease the cost of living. The history of developing frontiers, such as the open seas via shipping practices and the American West via railroads, demonstrates the effects of this evolution in public role.
The basic infrastructure needed should be attainable in 10 to 20 years within the same budget currently appropriated to NASA, with the following features:
- Fuel depots (essentially gas stations) in an appropriate orbit
- Fuel (from water) and water itself
- A shuttle for travel to the lunar surface
- Lunar facilities, for resupply and water and aluminum mining for construction in space
- Orbital facility complex
While this list sounds ambitious, it is technologically feasible currently and would allow the private sector to develop pragmatic use for space’s assets much faster than government provision. This creates a sustainable market-based economy in space that our current approach obstructs. A commerce-based structure, much like we have with the seas and airspace, in which government provides a legal framework where the private sector can flourish, would greatly advance our use of the space environment, maximizing our potential to pursue these activities. Allowing the private sector to continue to advance private launch vehicle technology, and instead spending public funds on infrastructure, not only drives efficiency but creates a financially self-sustaining commercial industry. A great deal of low-hanging fruit is available if (and only if) we make a whole-hearted decision to turn from a merely scouting and near-offshore use of space to being a spacefaring nation.
This can all happen within the current NASA budget. In a commerce-based approach, the private sector develops the space industry and NASA and other government parties buy transport and other key services, such as on-orbit facilities, as customers of the private providers. NASA has already begun buying some space transportation in this manner, just as we currently do with other transportation systems. Extending this good start and making it more consistent is the only way, within the current NASA budget, that leads to comprehensive advancement in space.
This approach does not fault NASA, the Air Force, or the other government agencies in charge of American space launch. Almost all the approaches used by cutting-edge companies like SpaceX and Blue Origin were well known to aerospace engineers and had been thoroughly discussed in aerospace engineering forums for decades. Furthermore, the decision-makers at the top of the relevant government agencies were for the most part intelligent and experienced engineering managers. This study finds the fault lies primarily in the structure of the current system itself, especially the interplay between Congress, the contractor companies, and the agencies charged with maintaining America’s space capabilities. The current structure ties space development to conflicting political requirements and fails to fund projects adequately, making for suboptimal decisions by managers, administrators, and politicians. In contrast, changing to a commerce paradigm, in which government funds infrastructure, lays the foundation for a sustainably funded space industry.
Given a functioning transportation infrastructure, as the private sector develops space industry, government’s role changes to fostering that industry. What space commerce needs from government is a legal framework in which to operate that defines and defends property rights and research (especially on human health in space) that leads to more diverse space activities. Taking cues from agreements on the way various nations regard the bounty of the seas, government can ensure a sustainable and equitable free market environment. With models from other frontier exploration, government should focus on creating the legal framework to allow commerce and private endeavor to flourish.
We cannot imagine how profoundly, comprehensively and quickly technological advancement—when it is commercialized—changes our everyday lives. Every single time, and by orders of magnitude, we underestimate its power to improve ordinary people’s lives once it becomes widely used through commercialization. For example, we cannot each own a jet, but today almost all of us can afford a plane ticket. This is due to the tangible effects of the synergy of technology and commerce. These effects occur so universally that any discussion of new technological frontiers should assume a blind but well-grounded expectation of manifold global rewards if only we have the foresight to encourage its proliferation. Examples from sea, land and air transportation, the Digital Age and countless other endeavors prove that technology combined with commerce triggers comprehensive advancement at a lower cost. America’s future success in space depends on restructuring our approach to accommodate such a vision.
Commercialization Creates a Self-Sustaining Space Industry
Despite the best current efforts of the private sector in this direction, it’s not yet an industry. Yet, launch companies have managed to create a profitable service focusing on occasional launches of very high-value payloads at very high prices. For example, the geosynchronous orbital position for telecommunications is so valuable that even our current highly inefficient way of accessing it is profitable.
SpaceX’s Falcon 9 launch success at one-third the price of a traditional NASA-contracted launch demonstrates the private-sector capability to fulfill many current NASA functions at a fraction of the cost. Such achievement frees up NASA to concentrate on its core research and exploration missions in space and allows the private sector to invest in self-sustaining space-based industry. Developing the industry depends on a certain amount of infrastructure, which can pay for itself by freeing up funds currently used for NASA’s SLS (Space Launch System)/Orion program.
This redistribution of current NASA funding is the key to paradigm change, although there are political problems with terminating the current SLS/Orion program in closely contested states in the 2020 presidential elections—states like Alabama and Florida. A compromise solution might be to push for increased spending on commercial service purchase, while SLS proceeds to flight status since the SLS will run out of surplus Shuttle engines by the early 2020s.
Moving our funding of space activity from solely the exploration function to a mixture of privately funded commercial industry and publicly funded research is signaled by the private sector’s current capabilities, and the commercial-quality resources already identified in space that the current paradigm prevents us from harnessing. Also, changing to a commercial approach allows for efficiencies such as mass production of equipment and standardized designs that can carry cargo or humans with few modifications—which is much cheaper and more effective than what we do now. No matter how much money Congress sinks into status-quo space activities now, utility will continue to decline, making funding increasingly ineffective, and keeping the U.S. space program confined. The first step in progress is systemic change, beginning with policy change. Every single change that makes space operations more like airline operations bears fruit in lower costs, and those changes, in turn, trigger further reductions in costs.
Triggering Large-Scale Advancement in Space Without Additional Federal Funding
Private sector launch allows the market to exploit every available efficiency to develop the cheapest, most effective means of space travel. When NASA becomes a paying customer of such transportation, it fosters the development of simpler and vastly cheaper launch and vessels, which are now the most expensive, difficult and complicated part of space activity. With cheaper launch comes more launch—for the same or less cost. This allows the private sector to exploit its best uses and NASA to do the same, for more NASA emphasis on research and less on transportation.
With NASA as an anchor tenant on a privately contracted space station, funding is available for infrastructure such as orbital facilities, which expands current space activities and makes them better and cheaper to accomplish. Much like the move to railroads did for U.S. exploration and settlement of the American West, transportation infrastructure levers progress in all sectors, usable for commercial, scientific and military pursuits—without increasing NASA’s space activity budget. By redirecting funds, space infrastructure would likely be available by the mid-late 2020s.
The potential exponential cost reduction and technological advancement of such a paradigm shift cannot be precisely quantified. This is especially true in a frontier-like space, where we have only begun to identify caches of resources and uses of physical and material properties of space. This study gives rough order of magnitude cost and timeline estimates based on our current technological capability, knowledge of space resources and current costs, with firm estimates in the near future—through about 2025, when infrastructure would be complete enough to support a fully commercial space industry. From that point, estimates are less firm, as depicted by dotted lines in Figure ES1, as we cannot know which technologies will dominate and which additional resources and efficiencies will proliferate. New ideas will be tested and many will fail. Some companies will fold and others rise up with new perspectives. Such a pattern and outcome is consistent with past technology leaps and acquisition of frontiers. But we know from history that transportation infrastructure catalyzes economic advancement and that industries are created and sustained through private investment and commerce.
This study examines our current radical transformation in space transport as private actors and market forces have slashed the costs of accessing space. These advancements have already greatly reduced costs for not only NASA, but also civilian (mostly satellite) and military space transport as well. These cost reductions, especially for classified military applications, cannot be quantified within the current available budget breakdowns, but are likely to follow similar cost reductions to NASA’s. As with other transportation industries, increasing efficiencies continue to drive down costs, but order of magnitude efficiencies come with infrastructure that can sustain a space-faring industry, where NASA and military and civilian companies become customers on private space transport, as we have seen with shipping and rail industries and even with Antarctic exploration. We argue for shifting to an approach based on our current reality of new private launch capability at a fraction of the cost of government procurement, whereby government invests in infrastructure and allows the private sector to innovate to develop efficient transportation and financially sustainable use of space resources.
Policy Recommendations to Congress
To set NASA and the U.S. space sector on the right path, we make the following recommendations:
The U.S. government should continue active planning as begun by the current Administration for the defense and internal policing of U.S.-flagged spacecraft, space stations, and extraterrestrial facilities, including consideration of creating a Coast-Guardlike constabulary service for space. The U.S. government should also create a working group, including representatives of the space development community, to examine and make recommendations on the space treaties and international legal environment as they affect the U.S. space sector. Upon its reporting, the U.S. government should give due consideration to its recommendations regarding interpreting, modifying, and/or withdrawing from existing and pending space treaties and agreements. The U.S. should begin discussions with other market-oriented, space-using nations on a multilateral agreement within or without the framework of the Outer Space Treaty, recognizing each other’s property claims on space assets.
Congress should create legislation establishing U.S. recognition of transferable resource rights, analogous to private property rights, based on first capability of reaching space resources, and transferable rights to keep-away zones around space objects, consistent with international law. It should, furthermore, create safe-harbor provisions for buying, selling, and hypothecating such rights on open markets or exchanges and in commercial and financial contracts under U.S. jurisdiction without risk of prosecution for fraud, provided that such rights are appropriately registered and verified by the U.S., consistent with international law.
Procurement Policy Recommendations:
The U.S. government should declare a policy of reliance on the private sector for launch operations and in-space facilities on terms and conditions similar to those of private sector users, starting with commercial resupply and crew transportation to ISS. The baseline future scenario for an ISS should be the government’s letting of anchor-tenant contracts for research space in an orbital facility or facilities.
NASA missions of any sort, including science and exploration missions, should be performed whenever possible by issuing purchase orders for results, such as data gathered from specific targets under specific conditions, rather than contracting for the development of means of obtaining such data. Evidence of market failure, judged by an agency external to NASA, should be required before permitting NASA contracting for construction or operation of spacecraft.
The U.S. government should establish a working group that includes representatives of the space development community to recommend procedures and mechanisms to ensure that NASA’s spaceflight and space operations research supports private sector research and development in the same way NASA and its predecessor, the N.A.C.A., support the aviation industry.
Policy Implementation Recommendations:
The U.S. government, in an agency external to NASA, should establish criteria to determine when the U.S. private sector capabilities in heavy-payload launch become sufficiently reliable that NASA should establish a timetable for exiting the development of large-payload launch vehicles and winding down existing large-payload vehicle launch operations.
The government should select NASA’s future exploration missions (crewed and uncrewed) so they can take on propellant from an on-orbit facility, establish advance purchase contracts that are financially trustworthy for the purchase of that propellant and, with private industry, develop standard interfaces and interconnects for the delivery of that propellant. The industry should be allowed innovative freedom to find the best delivery mechanism. Such a pilot on-orbit refueling facility should be a 10-year objective, including a government open purchase order for delivery of water to an orbital fueling facility at a fixed price equal to the effective price of fuel launched from Earth, which should be unlimited for the first 10 years of operation.
NASA, in its periodic setting of solar system research and exploration priorities, should give preference to dual-purpose probes—i.e., those that serve both scientific research goals and also provide useful scouting data for space resource harvesting, and further possible economic uses of space and its properties.