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Space Elevator ROI

This is an excerpt from an article I contributed to Liftport Opening Space to Everyone Copyright © 2006 Liftport Inc.

In economic terms, a Space Elevator (SE) is to rocketry what railways and public transit systems are to automobiles. The technologies to move massive amounts of people and cargo into space inexpensively are coming on stream but the possibility still exists for space to be rendered inaccessible by economics.

There’s no question SE’s will lower the cost of going to space by orders of magnitude. The question is will the cost threshold be low enough to make a profit for the existing terrestrial industries that will pioneer the space economy and bootstrap whole new industries we haven’t thought of yet.

Return On Investment (ROI) will determine when (and possibly whether)
humanity will be able to bolster Earth’s economy and environment with space

It’s clear to Jim Benson, CEO of California satellite manufacturer SpaceDev why the human race needs to get into space in a permanent, economically viable way. After selling off his software companies Benson was looking for new challenges. He read Mining the Sky by Dr. John Lewis of Arizona University and it resonated with his Bachelor of Science degree in geology. His life was changed.

“I was so excited about the book I bought 50 copies and for the next two or three years gave copies away to people I was trying to educate about the abundance of natural resources in space and how easy they are to get to,” says Benson. “That was one of my main reasons for founding SpaceDev.

“We don’t want to go the Moon or Mars. We want to be going to Near Earth Objects. That’s where the wealth and life support and water is. I’ve been saying for a long time that water is the white gold of space.”

The problem is getting to those resources in a cost-effective way. A new technology like a Space Elevator (SE) will lower the cost of going to space but Benson believes before it can get off the ground we also need a new way of doing things here on earth. ROI begins in the business model.

“My favorite slogan is ‘if we want to go to space to stay, space has to pay’,” says Benson. “Everybody knows it costs from US$5K to US$40K per pound [to bring something to space] today. That’s just a given.”

The reasons for the high cost of leaving Earth are as much systemic as they are practical. Benson is working to change the existing system from within by “bringing the microcomputer way of thinking into space.” SpaceDev turns out what it calls micro and nano-satellites designed to reduce the cost of manufacturing and launch.

“When SpaceDev designed ChipSat for NASA there was definitely requirements for the ability to withstand g-forces during launch. I believe it was 10g’s in all three axes. That’s pretty ridiculous,” he exclaims.

“No launch vehicle today generates those kinds of forces. That’s typical government fear of failure. There are some expenses to meeting unrealistic requirements like that but it doesn’t add that much to the cost. The big cost is simply the launch vehicles [and] the cost of launching itself. That’s the heart of the problem.”

An SE will shift existing economic paradigms and create whole new ones by making the ride to orbit mundane. Achieving that requires a perceptual shift in those that would build it of a similar or greater extent.

"If a project like this is going to be undertaken it needs to be undertaken by a new company. I really think this has got to be done by a private sector company that’s not one of the usual suspects," contends Benson.

“Boeing and Lockheed feel like they’re entitled to their share of the military and NASA space budgets.

"They don’t know and don’t care about doing things in innovative, lower-cost ways because almost everything they do is on a cost-plus, fixed fee contract basis.

“The higher the cost, the bigger the fee so they have no interest whatsoever in doing anything that’s innovative or cost-effective.”

Benson feels it’s time for an entrepreneurial revolution. “We have to look at everything [and ask] is it profitable? If it’s profitable then it’s sustainable. Until this point, almost everything in space, except communications satellites, has been government-financed,” he says. “There’s been no thought given to profitability therefore no thought given to sustainability.”

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