Essay by Louis

Since the dawn of time, man has looked to the heavens for inspiration, guidance, love, desire and a longing to explore. In 1957 man took the first step in opening a new frontier and hurled an object into earth orbit. In the 54 years following that brave endeavor, we have witnessed several accomplishments in the pursuit of space exploration. But have we done enough?

Is it politics, economics or human issues that currently impede the pursuit of space? Certainly, the global economic state is not conducive to a frivolous gamble on a new frontier, yet many industries and scientific endeavors continue to prosper in light of these troubled times. As for the human issue, one could argue that perhaps we should take the money intended for space research and feed the hungry or provide a home for the homeless. Perhaps it is the politics that is the underlying issue. The question of ownership, law and bureaucracy play an important role in the case for space.

How does one overcome these obstacles and create a successful space venture? Many have delved into this conundrum and presented a variety of potential solutions. From government funding to donations to “angel” investment, the list goes on. It appears to me that the fundamentals of a space venture is that it need not be any different than any other “business” venture. The plan must show potential for profit or accomplishment of an objective within a prescribed and attainable budget. Why is this so elusive in the space race?

Perhaps, the concept of funding a space venture is too obscure for the typical investor to visualize return. Why is this since the communications industry does it all the time when they send satellites into space? Any space venture would entail all the same variables an investor would expect to see in a terrestrial-based venture. All the considerations such as marketing, labor, distribution, transportation, processing, etc. are common to a space venture as well. Maybe then, it is that no one is able to present a model that satisfies the requirement of profit or accomplishment of an attainable goal. Why not? Why is it so difficult to show a profit in a space venture?

At the top of the list of prohibiting factors in space ventures is launch costs. The current cost is still about $10,000/kg and that cost does not go down significantly with volume. Another big factor in consideration of a space venture is loss which is almost always a 100% loss. In a space mishap, there is little chance of recovery and even if there were, the cost of recovery would be prohibitive. There are added research and development costs and little data to back the claims and assertions a new venture may propose. Much of the data that exists is proprietary or not directly relevant to a business model. Another consideration is the factor of return on investment over time. An Earth-based business can put all the blocks into place for a venture in a fraction of the time a comparable space venture could.

Let us examine an Earth-based mine versus a space-based mine on the moon. Both must form an exploration team. The Earth team can be flown to even the most remote places on Earth on readily available transport and on a moment’s notice quite economically. There is about a year lead time to scheduling a rocket launch, assuming your cargo meets all the specifications required by the launch vehicle. You would need to design and build a “capsule” to carry your team and equipment to the moon and back safely. Optionally, a robotic exploration team could be employed reducing the cost substantially but still far greater than the Earth team. Once the samples are collected and analyzed there may be a need for further exploration or potentially to scrap the planned mine should the results be unfavorable. At this point, the Earth team is out typically less than $1 million whereas the moon team is out at least tens of millions to potentially billions of dollars.

If one is to continue this analysis, the cost of the space mine simply cannot be justified on a purely financial basis. There must be other factors to aid in the viability of a mine in space. If the space mine was to produce minerals for return to Earth there would be the added requirement to justify the significantly higher cost over that of availability on Earth. There are very few minerals that could meet this criteria. Mining iron, aluminum and other common materials for return to Earth cannot be justified. Even precious metals such as gold and the platinum group minerals would be difficult to show profit. In order to justify the added costs involved in a space-mined mineral for return to Earth, there would be a need for an unusual circumstance that could aid in the cost justification.

Fortunately, these circumstances do exist and one need only exploit them to show market viability for a space mine. That however is not the best model for justification of a space mine. A space mining venture should be designed to cater to a space industry in which the minerals are used in outer space. The most fundamental of such a venture could focus on producing Hydrogen and Oxygen. A mine of this nature could immediately benefit further space ventures by reducing launch costs for fuel. A future launch could carry sufficient fuel to attain orbit and then be refueled for further mission stages. But what about other minerals? How does one justify mining iron or any other element?

Is there viability in less tangible ventures than mining in outer space? The answer is yes. I think that events of recent times help to support this claim. Groups like Virgin Galactic offering space tourism and Bigelow Aerospace with space hotels in the works show that there is potential.

How does one justify the cost and indeed fund the construction of a space habitat? When I first looked at this question, the only solution that presented itself was to pre-sell homes on the habitat. This solution still had the problem of how to sell a home that had no foundation or land for potentially millions of dollars. This solution basically boiled down to the same as “angel” investors. There was a further issue with this approach in that many countries have laws regulating how the sale of real estate works before the property exists.

The first attempt at a solution was to find a way to significantly reduce the cost of construction. This can be done with two strategies; the first is to lower the labor costs with robotic construction and the second is to pay less for the materials. Since the bulk of the cost was lifting the material from Earth, this left two new solutions; our own launch system or to get the material from space.

Harvesting the material from space quickly became the only solution with any hope of success. The best part about the space minerals is that they are free. We only need to pay for the system to harvest and process it. This significantly reduces the cost but we are still outside the range of an affordable home.

Our original habitat design was to house about 10,000 people and this became a new limiting factor. The cost of the mining equipment was the same for a 10,000-person habitat as it is for a million-person habitat. A larger habitat meant we could reduce the cost of a home by a factor of 100 or more. Now a home that would have originally cost a buyer millions and potentially billions of dollars could be reduced to as low as hundreds of thousands placing it in a realistic market. But this is not enough because we still need to sell this home to the buyer before there is anything in place. A $500,000 to $1 million purchase with nothing tangible is still a hard sell.

We still have two issues; the real estate laws and a high-end price for the home. We find a simple solution to the legal issues by making the project a cooperative. The members pay fees equal to the cost of the home and since they are owners in the cooperative they “own” space in the habitat they can call home. The high home price now has a means by which we could make it easier to afford. Coop membership fees could be amortized over the life of the project making for a reasonable monthly payment.

The cooperative quickly became the key. It opened the door to a world of potential since now we have a devoted membership paying into the project and as a “cooperative” we impose a small labor requirement providing us with a marketable skill base. This builds a sense of community that lends itself well to expansion. A portion of the membership fees could be diverted to Terran-based ventures and security. The cooperative will own Earth-based real estate to be used and enjoyed by all and other investments held for capital security and income potential. With a significant membership of 100,000 or more paying hundreds each month produces a good revenue for a great deal of investment.

Now we have an engine in place that guarantees a solid monthly cash flow and a mine in outer space harvesting and processing raw materials. We have a robotic labor force in outer space mining and building the habitat. We have Earth-based real estate investments securing our membership’s investment. We have a labor force contributing to the project as well as the ability to contract it out. But is this enough?

We add another factor to our strategy in order to further reduce the fundamental cost. We establish a technical institute that specializes in the engineering and technical disciplines needed for our industry. This school becomes a research facility as well as a factory for our proprietary technology. The students learn the technologies with hands-on assembly of systems for robotics, mining and other technical needs. This is better than free labor because the students pay for the education and in the learning process “build” our technology. This strategy applies to many of our required technologies such as robotics, aerospace, computers, software, electronics, bioengineering, etc etc etc. This process produces a net reduction in the necessary cost of membership and provides us with a dynamic intellect base.

All this considered, we have a strategy for a cooperative that seeks to have a membership of 350,000 members. We plan to construct a habitat that will house over 2 million people. We sell a membership for a reasonable $300/month and 10 hours of labor a month. The memberships represent a potential for $105,000,000 and 3.5 million man-hours of labor each month. This is still a hefty number for a person to dole out on almost pure speculation. The cooperative secures a minimum of 20% of all membership fees in Earth-based enterprises and real estate. This adds a tangible edge to the investment. The membership is fully transferable in that it can be sold, willed, gifted or whatever the owner deems equitable. As the project approaches fruition the value of the memberships should inflate substantially.

Our space mining endeavors will produce byproducts that could be used to satisfy Earth's demands. Rare Earth Elements or REE are a set of high-priced elements that are in growing demand. China is by far the leading producer and it has already begun restricting export in favor of its own industrial needs. This makes it a viable market to return these minerals back to Earth from our space mines. Our mining endeavors will produce other products that may have marketable value. The Hydrogen and Oxygen market in space needs little marketing since the demand is obvious. Our iron/steel mining and processing means that we can promote and support a space-based construction “boom” in the same way that the industrial age and automation bolstered development on Earth.

Based on our 25-year model, we have a cooperative with a membership of several hundred thousand providing the backbone of our cash flow requirements. We have an infrastructure in outer space to provide most of our material needs at very little cost through our mining ventures. We have an Earth-based intellect and manufacturing capability to meet any challenges via our technical institute. We have a free and diverse global labor force to support any of our requirements through membership obligations. We have a diversity of financial security through Earth-based investments. Our membership can invest with the confidence of a model that demonstrates both fiscal and technical competence as well as investment security. All we need is you.

Copyright © 2011

Louis C Gelinas

Virgin Galactic and Bigelow Aerospace are registered trademarks of their respective owners.