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Space: More than just a billionaire's playground
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The Final Frontier.
In May of 1961, President John F. Kennedy announced America's plan to send a man to the moon and bring him back safely to Earth before the end of the decade. This seemingly outrageous goal kick-started a Cambrian explosion of technological innovation. It inspired children and adults alike to become astronauts and go where no human had gone before.
Sixty years on, we’ve seen the space industry flourish and crash. High costs and long commercialisation timelines have pushed out our dreams of floating through space and staying in space hotels. In 2021, we’ve never been closer to this being a reality. Today’s space race is hot and fuelled by egotistical billionaires looking to accomplish the unbelievable. However, there is more to space than just landing on the Moon and colonising Mars.
Drivers of the Space Ecosystem
There’s a burgeoning ecosystem of talented entrepreneurs and scientists looking to make the most of the emerging market and turn science fiction into science facts. The space economy is not solely restricted to space-to-space connections, but rather is more focused on facilitating Earth to Space and Space to Earth interactions. Before we dive into the weeds, it's important to map out what space looks like around Earth and the Moon.
Around Earth, there are several types of orbits, which if you remember from science class, is essentially a circular path that an object in space takes around another object. For example, the Moon orbits Earth. However, there are different depths of orbit, each with their own advantages:
Low Earth Orbit (LEO): Most commonly used for communication and remote sensing satellite systems. The International Space Station and the Hubble Space Telescope orbit at LEO.
Medium Earth Orbit (MEO): Mainly used for navigation systems including GPS satellites.
Geostationary Orbit (GEO): At GEO, objects orbit the Earth's equator and are mainly used for telecommunications and Earth observation.
Sun-Synchronous Orbit (SSO): Objects in SSO move in line with the Sun, passing over a spot on Earth at the same local time every day.
High Earth Orbit (HEO): Unlike the other orbits, HEO is an elliptical orbit, with one end closer to Earth than the other. Satellites in HEO are typically used in communications, satellite radio, remote sensing and other applications.
To get up into these levels of orbit, we need to leave Earth. Enter rocket launches.
This is probably the area of space that most of us are familiar with. Previously led by NASA and other global space agencies, we are now seeing a group of eclectic billionaires funnel a ton of money into developing large rockets that can shoot up into space. This year alone, both Richard Branson’s Virgin Galactic and Jeff Bezos’s Blue Origin launched successful trips to space in their race for commercial space travel.
Whilst space tourism is certainly interesting, space is also home to 1,000s of satellites orbiting the earth and facilitating millions of connections around the globe. Getting these satellites into space is not cheap and has created a push towards manufacturing reusable rockets and a fleet of space-bound ridesharing services.
Essentially an intergalactic carpool, space ridesharing services all multiple smaller satellite (smallsat) operators pool together to maximise space on a rocket and to lower the launch cost of getting a satellite into space. To book a spot on one of these rockets you can either be a lead customer or a follower. If you are the lead customer, a launch service provider can help match and aggregate other customers who also wish to send satellites up into space. Followers are at the whim of the lead customer in terms of when the satellites launch into space and which orbit they land in following the launch.
With the rise of rideshare launches, many smallsat operators are able to get into space but may compromise on which orbit they get dropped off to lower costs. As a result, there is a growing need for a robust last-mile logistics service in space. This is where space tugs come into play. Startups such as Momentus Space and Atomos have developed space tugs, a type of spacecraft, that can transfer satellites or cargo from one orbit to another easily. They reside in space and are called upon when needed. This approach lowers the cost to orbit, reduces the time it takes satellites to get into space and increases the number of orbits that can be reached with a single rocket.
To date, the bulk of the space economy revolves around satellites. Satellites are growing increasingly critical for sustaining life on Earth. They are used for everything from internet connectivity to archaeology. So far in 2021, over 1,300 satellites have been launched into orbit. Up until the early 2010s, there were 60-100 satellites launched into space on a yearly basis. The rate of deployment has increased exponentially inline with the increase in the number of connected devices on Earth.
Whilst it's cheaper than ever before to launch satellites into space, they are also a lot smaller. 94% of all spacecraft launched in 2020 were smallsats, weighing less than 600kg. The bulk of these are used to observe Earth or to provide connectivity to the internet through services such as Starlink and OneWeb who aim to create mega-constellations in LEO.
However, with Starlink alone looking to launch 30,000 satellites and Amazon's project Kuiper also aiming to launch 3,236 satellites, the sky is starting to get crowded. Astronomers are already complaining that these smallsats are blocking out the stars and there are fears that both optical and radio astronomy could be heavily affected. The increase in the number of satellites and cargo in space also poses the problem of increased debris floating around.
Space debris is essentially any nonfunctional human-made object in space, including rocket parts that have been abandoned in orbit, defunct satellites and fragments from orbital collisions. According to NASA, there are over 30,000 objects larger than a softball in orbit, travelling at speeds of up to 18,000 miles per hour. Even the tiniest debris can disable an operational spacecraft. For example, a fleck of paint was enough to damage a window on the International Space Station which has increasingly been forced to navigate its way through debris. Startups such as Astroscale and D-Orbit are hoping to remove debris or at least mitigate space debris. LeoLabs are also using radars to track small debris so that launch providers and satellite operators will be more responsible for mitigating and removing their debris.
Tourism and Exploration
Whilst Musk's goal of colonising Mars has become the poster child for Space tourism, there is more to it than just visiting other planets. Dennis Tito was the first space tourist visiting the ISS in April 2001, paying a cool $20 million for the privilege. Since then, only 7 other tourists have followed suit, however this number is expected to grow exponentially in the next few years.
Axiom Space, a unicorn startup, plans to launch an all-private crew to the ISS for the first time. All up, the eight day trip costs $55 million per person, and includes 15 weeks of training. It's definitely not a relaxing holiday. If you're looking for something cheaper, Blue Origin and Virgin Galactic's suborbital trips are priced between $200,000 - $250,000 for a quick 10-15 minute trip.
Interestingly, facilitating trips to the ISS is just a side hustle for Axiom Space. Their actual goal is to build a modular space station by 2028. Initially attached to the ISS, Axiom plan to launch its first module, including research facilities and living quarters for four crew members in 2024, with a second module, a microgravity lab and a power tower to launch in subsequent years until 2028. At this point the Axiom Station will detach and begin to self-orbit. Interestingly, there are a few competitors in this space such as Orbital Reef and Starlab.
If depleting Earth of its natural resources wasn't enough, we've also embarked on a mission to mine asteroids for minerals, metals, water and other valuables. Asterank, an asteroid database of more than 600,000 asteroids, states that there are about 1,000 asteroids that could contain billions of dollars in raw materials. Asteroid mining is akin to the gold rush. It attracts the starry-eyed dreamers who hope of hitting it big, but to date, haven't been able to deliver.
There are a few companies in this space that are trying to accomplish this audacious goal. The originally named Asteroid Mining Corporation plans to launch a probe in 2035 to mine 20 tons of platinum. Unfortunately, this has been tried before and burnt a few notable investors. In 2014, Planetary Resources raised $50 million from investors such as Tencent, Larry Page, Eric Schmidt and filmmaker James Cameron. It quickly hit funding constraints and was sold to blockchain startup ConsenSys in 2018.
Asteroid mining is a tough business due to the costs associated with transporting cargo in space. This is largely due to gravity. Leaving and entering the Earth's gravitational field is tough and current payloads cost just over $5,000 per kg to transport to Mars. A Caltech study put the cost of an asteroid-mining mission at $2.6 billion, with a football-field-sized Asteroid containing as much as $50 billion of platinum.
Whilst most of the innovation in this area has occurred in the US and in Europe, the Australia government has made a push into this space with the formation of the Australian Space Agency in 2018. This has lead to a host of new startups in Australia focused on various areas of the space ecosystem.
Space Machines - Space Machines is looking to solve the last-mile delivery issue in space through their space tug. Still early in the journey, they plan to support missions from LEO into deep space, whilst also facilitating Life Extension, Debris Management and In-Space Assembly services.
HEO Robotics - HEO uses cameras that are already deployed on Earth-observation satellites to collect images of other satellites in space on behalf of their customers. By closely observing deployed satellites, HEO helps its customers to ensure their satellites are working as intended, orientated correctly and with all payloads properly deployed.
Fleet Space - Fleet Space have developed a range of nanosatellites (the size of a shoe box) which are cheaper, and easier to launch compared to traditional satellites. The goal is to get global coverage of these nanosatellites in order to facilitate better IoT connectivity.
Gilmour Space - Gilmour Space have developed a small satellite launch rocket (25 meters tall) that can deliver a payload of up to 215 kg to SSO. Going smaller is a unique proposition in space when previously the trend has been to increase the capacity of a rocket to create a cost effective method of launching satellites into space.
The Future of Space
Space has always been a moonshot bet. As a society, we were enthralled by the moon landing and excited for the exploration of the galaxy. However, it hasn't always lived up. Tech hasn't moved fast enough and the large budgets required for a fully-fledged space program were incredibly prohibitive.
However, with the new age billionaires chucking endless sums of money into their personal vanity projects, it's also given hope and sparked dreams in many that one day, it actually might be feasible to visit space. Furthermore, there are increasingly cheaper and easier ways to facilitate the launch of satellites into space. This, in turn, creates revenue for an industry with large commercialisation timelines which can fund some of the longer-term projects such as colonising Mars or building private space hotels.
Whilst it's cool that technology has advanced to this point where we can reuse rockets, and civilians can reach a suborbital level, it begs the question of whether this is the best use of investment capital. By dumping trillions into space exploration and economy, are we just running away from our problems on Earth? With that perspective, it would be interesting to explore whether some of the learnings from space research can be applied to activities on Earth.
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