Insight - Boom or Bust in Space Resources Policy

Monday, February 4, 2019

By Ian Christensen, Director of Private Sector Programs

Since 2015, the topic of private sector access to, development, and utilization of space resources has attracted considerable attention in national and multilateral space policy fora. Popular imagination has been engaged by breathless media portrayals of the trillions to be made in a new space gold rush. The United States passed the Commercial Space Launch Competitiveness Act and Luxembourg also passed national legislation, both of which created formal domestic legal frameworks for commercial space resources utilization. And pioneering companies in the United States, Europe, Japan, and elsewhere pushed forward in early stages of business plans focused on space resources development.

However, the late 2018 acquisition, and thus the apparent end of their asteroid mining plans, of two prominent U.S start-ups - Deep Space Industries (DSI) and Planetary Resources International (PRI) - has led some to suggest that the asteroid mining bubble has burst. Although this was definitely a setback for near-term commercial viability, important policy and legal work related to commercial space resources development need to continue.

Since 2016, SWF has been a member of the Hague Space Resources Governance Working Group, a multistakeholder civil society dialogue working to develop a common legal framework to enable space resources development in a manner consistent with the established treaty regime governing space activities at the international level. Our involvement is driven not only by the near-term questions raised by the activities of start-ups like PRI and DSI but also in recognition of the long-term potential of space resources as a key enabler of an expanding space economy and the need to provide a stable and responsible legal regime in support.

Recently published macro-level market forecasts indicate there is still a viable market and business opportunity in the development of space resources for commercial, scientific, and exploration uses. A 2018 study commissioned by United Launch Alliance identifies “a near term annual demand of 450 metric tons of lunar derived propellant equating to...$2.4 billion of revenue annually.” Similarly, a 2018 market study commissioned by the Luxembourg Space Agency forecasts that “the space resources utilization industry is expected to generate a market revenue of up to 170 billion EUR over the years 2018 to 2045.” Start-ups like DSI and PRI represented early attempts to capture parts of this long-term potential market.

Realizing these market forecasts will require navigating economic, technical, policy and legal uncertainty in order to translate macro-level potential into achievable business plans. Governments and industry actors are entering into public-private partnerships which attempt to reduce technical and economic uncertainty. For example, in November 2018, NASA awarded contracts to nine commercial entities (including teams with non-U.S. partners) to develop services over a 10-year period for commercial payload delivery to the lunar surface. In January 2019, the European Space Agency (ESA) awarded a team composed of established launch services provider ArianeGroup and the lunar exploration start-up PTScientists a contract to perform a concept study for a mission to mine lunar regolith. Also in January 2019, Israeli aerospace company IAI and German satellite manufacturer OHB System AG announced a partnership to develop commercial lunar lander services, in support of ESA’s in-situ resource utilization initiative. Clearly - despite some recent setbacks - commercial activity in space resources development, in partnership with governments, will continue, albeit with a near-term emphasis on lunar activities as opposed to asteroids.

Given the economic potential of space resources, the continued interest from governments around the world, and the considerable commercial uncertainties, it is important to continue efforts to develop coordinated international principles for policy and legal frameworks related to space resource development. SWF will continue to contribute to such effort. In March 2019, we will partner with the Space Policy Institute at George Washington University and the Space Economy Evolution Laboratory at the SDA Bocconi School of Management to host a one-day workshop in Milan, Italy, to explore the assumptions and steps necessary to achieve the market forecasts referenced above. This invitation-only workshop, which will feature a cross-section of commercial and government actors contributing to space resources development, aims to provide increased understanding of the economic uncertainties in this area, as a resource to both the business and policy community.

SWF will also continue our participation in, and support, of the Hague International Space Resources Governance Working Group. The Working Group intends to finalize its proposed set of Building Blocks for an international framework on space resource activities by the end of 2019. These Building Blocks set out the basic principles and topics that should be considered by multilateral fora and domestic authorities in developing adaptive frameworks for the governance of space resources utilization. The Working Group intends to provide additional supporting material to elucidate the connections of the Building Blocks to topics like benefit development and sharing, capacity-building, and safety of space resources operations.

From a policy standpoint, commercial space resources utilization is best understood in the context of a broadening and diversifying set of private sector space activities. Developing effective legal and policy regimes for these activities requires the coordination of multiple different stakeholder groups and the identification of enhanced mechanisms for improving understanding between the private sector and the multilateral space governance fora. The process represented by the Hague Working Group provides one example of how this might occur. As space becomes an increasingly commercial domain, national governments are using policy and financial tools to competitively position their emerging space sectors (including space resources) for growth. Coordination of basic legal and policy principles, such as those represented by the Hague Group’s Building Blocks, can serve to reduce instability and uncertainties related to regulatory fragmentation across different jurisdictions.

Ultimately, DSI and PRI may well be remembered not for their technical successes, but rather for their role in catalyzing the development of both legal and financial frameworks necessary for the development of a sustainable space resources sector. Space resources policy will likely continue to be a boom area for further development and coordination, no matter the business prospects of any given set of commercial entities.