NEEP 602 Lecture #41

NEEP602 Course Notes (Fall 1997)
Resources from Space

Lecture #41 Show me your ROI!

Title: Planning for Lunar Self Sufficiency

Notes:

"Pure" Management Components for a 3He Enterprise

Professor Thompson's analysis indicated that a lunar ³He mining activity would be of interest to investors if the government financed its R&D in return for supplies of resources it would need at a lunar base (Lecture #34).

His analysis of a purely private initiative, focused only on lunar ³He mining would not be financially attractive.

Are any major private initiatives possible in space without the government's direct financial assistance?

Of course they are, the precedents being:
- Geosynchronous communication satellites and satellite communications services (many examples with more appearing every year)
- Low Earth Orbit communication satellites constellations
  - Iridium, Odessey, Geodesic, ORBCOMM, etc.
- Low Earth Orbit remote sensing satelites
  - Earthwatch, ORBIMAGE, SpotImage, Lockheed/Martin, etc.
- Launch services (government an essential customer in all cases so far)
  - Orbital Sciences' Transfer Orbit Stage, Pegasus, and Taurus
  - McDonnell Douglas' Atlas
  - Lockheed Martin's proposed LMLV family
  - Ariane (sort of)
- Note that governments are usually significant if not major customers of these services.
Are "Really Big" Private Initiatives Possible in Space?
- Similar scale, largely private investment projects:
  - TransAlaska Pipeline - 1977 - $8B (~$20B now)
  - England to France "Chunnel" - 1995 - $15B
  - TransContinental Railroads
  - US Surface Communications Infrastructure
  - Aggregated Satellite Communications Investments
  - Others?
- Most of these provided near-term returns on investment as well as internal cash flows that supported expansiion.
Must meet national and international regulatory requirements
- Launch licenses (DOT)
- Communication frequency allocations (FCC and ITU)
- Environmental impact (EPA and international precedent)
- Outer Space Treaty obligations (Dept. of State)
- Other treaty oblications (?)

Launch Costs (see Schmitt, 1994)

The longest financial pole in a large tent full of long poles.
- Professor Thompson has shown that the major factor in the cost of large space projects is launch cost.
- With respect to lunar 3He, $1000-2000 appears to be about the limit and still have an attractive rate of return for investors
  - The potential market in space for lunar volatile by-products has not yet been factored into this analysis
Apollo "capital" costs related to research, development, manufacturing, and operations were about $64 billion in current dollars, including the spacecraft, facilities, and training.
- Gave a Saturn V launch vehicle that could place a maximum payload of about 43,000 kg on a lunar intercept trajectory as well as about two weeks of space operations related to that payload.
  - At the end of the Apollo Program, the cost of each additional lunar mission was about $3 billion, if one includes about $500 million as the cost of capital, or
  - Thus, the cost/kg for the Saturn V would be about $70,000.
    - In consideration of pure launch costs/kg, and given that the above numbers include spacecraft, operations, and training costs that would be allocated elsewhere, these Apollo numbers define the maximum cost evelope for any future return to the Moon.
However, it can be reasonably assumed that future launch costs, based on the engineering concepts of the Saturn V,would be significantly lower.
- Define a "Saturn VI" as follows:
  - Follow overall design concept of the Saturn V, i.e., liquid fueled engines and multiple stages, however, reusablitiy and strap-on boosters should be considered if appropriate
  - Payload to the Moon of at least 100,000 kg
  - Full delivery guidance and control capabilities
  - Crew rated in terms of reliability, however, uncrewed version also will be required
  - Robust design (no significant stand-down in the event of a launch failure)
  - Reliable and low overhead preparatory, launch, and flight operations
  - Design for long term, steady state production/launch rates of about one vehicle per month
  - End to end, manufacturing, assembly, and launch pad diagnostics for built-quality control and modular replacement of critical components
  - Modernize materials, electronic and mechanical componets, and fuels without raising overall costs
Considerations that should lower the cost/kg of the Saturn VI relative to the Saturn V are as follows:
- Long term production commitment.
- More than double the payload capability.
- Previous Apollo, Titan, and Shuttle experience premits the design to be focused and finalized at an early stage with little or no uncertainties or parallel designs.
- Design to minimum cost with new, proven technologies that can enhance capabilities as well as lower cost (e.g., computers, guidance and control systems, composite materials, etc.).
- New, proven manufacturing and test technologies can speed production rates (robotics, just-in-time inventory management, built-in diagnostics, modular design, end to end testing, etc.).
- Underused or surplus government facilities may be available for refurbishment and enhancement at less than replacement cost.
- New generation of talented, highly modivated young engineers and workers can be attracted to the enterprise.
Will the above considerations be enough to meet the $1000/kg cost goal set by Professor Thompson, that is a factor of 70 reduction over the Apollo baseline?
- It is not known as of now, however, if "long term production commitments" and "more than double the payload" can reduce the cost/kg to $20-25,000, at which point the other factors may provide the necessary remaining reduction.
- Note that a market in space for volatile by-products may help support a higher launch cost if absolutely necessary but should not be assumed until certain.

One means of attracting private financing would be to build-in early investment returns as well as a source of cash flow during the early R&D period.

Key business element is financing R&D, as Professor Thompson has shown

He also has shown that if the government assumes the burden of financing mining R&D, a reasonable return on investment can be expected.
- Probably cannot count on this possibility in the foreseeable future (see for example, Grim Budgets Spur Call to Action, Science, v 272, April 26, 1996, p 477.)

Full private financing may become possible by combining the lunar 3He mining initiative with the terrestrial 3He fusion electric power initiative.

Investment risk and R&D financing requirements reduced by sales of spin-off fusion technologies (Lecture #40)
- Inertial Electrostatic Confinement fusion devices can be built small
- There are existing and future uses for low cost sources of neutrons and protrons
Future returns on investment also increased by returns from sales of fusion electric power plants and/or electricity in addition to sales of lunar 3He and by-products.
contracts to supply government with technology, resources, power, and/or space access could reduce total private financing required

References:

Schmitt, H.H., 1994, Lunar Industrialization: How to Begin? Journal of The British Interplanetary Society, 47, 527-530.

Planning for Lunar Self Sufficiency

Lecture 41

Professor G. L. Kulcinski

Dec. 8, 1997

One Possible Approach to "Kick Starting" a Near Term Initiative For Using Lunar Resources

If we concentrate on one lunar resource, 3He, then we can ask ourselves, "what can be done to expedite the development of fusion devices that will burn the cleaner, advanced fusion fuel 3He?" The first thing to do is to contrast the traditional energy approach versus a commercial product approach (see Figure 1).

Figure 1

Why consider the development of IEC devices in a commercial product approach?

Figure 2

Figure 3

There have been several IEC devices built and Wisconsin now holds the record for DD neutron generation in a gridded device.

Figure 4

There are several fuels that can be burned in IEC devices to produce useful fluxes of neutrons, protons, and alpha particles.

Figure 5

Figure 6

There are many applications of particles from the DT, DD, D3He, and 3He3He reactions.

Figure 7

Positron Emission Tomography (PET) is emerging as a major diagnostic in the medical profession.

Figure 8

Neutrons can be used to make 18F.

Figure 9

Figure 10

A wide variety of positron emitters can be made with protons from advanced fusion fuels.

Figure 11

Small mobile PET generators could reduce radiation exposure to patients.

Figure 12

IEC devices could play an important role in the production of 99Mo for medical diagnostics

Figure 13

Figure 14

Figure 15

Land mines cause enormous damage to the civilian population,

Figure 16

and neutrons from small mobile IEC devices can be used to detect explosives;

Figure 17

to detect chemical agents;

Figure 18

and to detect transuranic elements (mainly fissionable elements).

Figure 19

Protons from D3He reactions can be used to transmute long lived fission products to very short half life elements.

Figure 20

Finally, the development of the right fusion concept, capable of burning 3He, can lead to short term as well as long term benefits to society.

Figure 21

References

G. L. Kulcinski, 1996, "Near Term Commercial Opportunities From Long Range Fusion Research", Fusion Technology, Vol. 30, p. 411.

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