The burgeoning space industry

We've been talking for a while about the new space tourism industry and because I hadn't seen an analysis of the entire situation, it seemed like that was (aside from distant plans to go to mars) the only thing happening in space. Well, fortunately that's not quite true. Although most of the plans set forth are of the "some day soon" variety, it is at least heartening to see that the effort is being made. There has been a large influx of cash into the space economy within the past decade.

In 1998, private-sector spending on space applications began to exceed government spending, and the gap is widening. A critical mass of entrepreneurs -- some with familiar names like Bezos and Branson -- have been backing space-related companies for years.

Jeff Bezos, you will remember, founded Amazon.com and Blue Origin. Richard Branson is of course head of Virgin Galactic.

The possibilities of space exploration are endless. Opportunity, however, is not enough to spur development. There has to be some impetus to get out there.

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).

So money is being offered for those who try and succeed. Success, of course, means the door is open for other followers. The question is why anyone would follow. Well, astronomers and cosmologists can tell you that the natural resources of the solar system make mining on Earth seem like a waste of time.

The long-term possibilities are even more celestial. Ever heard of 3554 Amun? It's a space rock about 2 kilometers in diameter that looks as if it might have fallen straight out of The Little Prince. There are three key things to know about 3554 Amun: First, its orbit crosses that of Earth; second, it's the smallest M-class (metal-bearing) asteroid yet discovered; and finally, it contains (at today's prices) roughly $8 trillion worth of iron and nickel, $6 trillion of cobalt, and $6 trillion of platinumlike metals. In other words, whoever owns Amun could become 450 times as wealthy as Bill Gates. And if you time your journey right -- 2020 looks promising -- it's easier to reach than the Moon.

That's one asteroid. In the asteroid belt, hundreds of thousands or millions are known to exist. Not all of them are that size or that rich in ore, but it wouldn't take many to make a difference. So from a business point of view, whoever gets out there first stands to make a good chunk of money.

Note: I do not advocate a frontier mentality in space, where the first comer gets to claim ownership of everything, as it will be impossible for most of us to make any kind of similar effort to build a space business. However, we would be well served by taxing any profits from space ventures. Imagine if the federal government took 10% of the profit off an asteroid mine worth 20 trillion dollars. Still, the capitalist mentality must be curbed, in that monopolies must not be allowed to form out in space any more than down here on Earth, and room must be left for future venturers.

Utilization of space resources is not the only area of growth. There's still plenty of money to be made right around Earth, and some businesses are in the process of doing that. The afore-mentioned Blue Origin and Virgin Galactic intend to do just that by offering space tourism (although at first, they'll actually just be brief suborbital flights). A third company, Space Adventures, is also planning to open up the space tourism market. Technically they were there first, because they're the ones who took a tourist to the ISS. That doesn't really count as mass market though, because very few people can afford the $20 million price tag.

Once space tourism becomes established, other projects will follow, such as space hotels, space research labs, trips to the moon, and who knows what all.

Space tourism, with its realization of constant flights back and forth and quick turnaround times, is exactly what the space shuttle program was supposed to be like. It wasn't, and we barely managed to crack the shell of what's possible in space for 20 years. But these new technologies enable people and objects to be sent into space for much less money, much more quickly and reliably. That's why other sectors of space industry will open up because of these developments. For example, solar satellites that collect energy from the sun and beam it in microwave form down to Earth. It may sound like science fiction (and that's what it was to begin with), but it's very possible. The sun shines 24 hours a day, and all you have to do is keep your satellite in it, or have a network of satellites to catch it and relays on Earth to send it. Despite the dangers of this technology, I can't see that continuing to use fossil fuels is any better.

In short, space could not only be profitable for a few big companies, the benefits could extend all the way down to us. I'll save the caveats for another post, because I think hope for the future is warranted.