NEEP602 Course Notes (Fall 1996)
Resources from Space

Summary of Final Observations Made By the Faculty of the

Resources From Space Course

Lecture 44

May 10, 1996

Each of the faculty members teaching NEEP 602/Geology 376 have attempted to summarize what they thought were the overriding points that the students should take away from this class. The outlines of those observations are given below.

Phil Brown

[1] Most important thing(s) I said possibly have little to do "directly" with title of the course. However,

[2] Most important thing I heard:

[3] This course has reminded me of the benefits of co-teaching especially when such an effort involves people with very different backgrounds

[4] The course appeals to me as one who grew up with the space program and as one who dreams and believes that this IS the future.

We should be aware and prepared.

Bob Meyer

Observations of the inner planets and the moon have provided stark contrasts which fit an evolutionary sequence in which distance from the Sun, and hence temperature, controlled condensation of the materials of planetesmals -- and then the planets. The light weight atomic/molecular weight condensates, so necessary for life, are retained, are dissociated by the solar wind and/or escape in to space directly distance from the sun and inversely with the planets mass and hence the acceleration of gravity.

Mercury has the highest mean density, presumably is made up of the highest temperature condensates and has little (no?) atmosphere. Venus and Earth, with size and similar mean density differ one from the other again due to distance from the Sun which not only affected the make up of the original condensates but perhaps more the ability to retain water which is key to the removal of CO2 from the atmosphere and in the ability to the incorporation carbon into sediments as on Earth. Mars, of smaller size (and mean density) has evidence that it received a rich endowment of water but gravitationally has been unable to hold on the substantial water because of its lower gravity.

In terms of contrasts, perhaps Earth, with its rocks which are weak and flow at depth, with or without melting, and its plate tectonics consistent with oceans floored with young intrusive and extrusive rocks is the most different from Venus. The second planet from the Sun has a lack of detectable water, high surface temperatures & run away greenhouse effects, apparently episodic-catastrophic tectonics, and dry rocks of greater strength at depth. Here, in this contrast, perhaps the influence of water on planetary evolution is clearest.

Ed Churchwell



Low Temp.         Large Mass
High Density      Clumpy Structures






John Santarius


Howard Thompson

What I want you to take away from this course is an intuitive feeling for the major financial issues associated with projects in space-or any project, for that matter.

In lecture 35 (viewgraph 8) I presented you with the 10 Maxims of Finance. I want to review few of them with you in terms of mining 3He (however, the principles apply more generally).

a.) Maxims 1&9 (The Risk-Return Tradeoff & All Risk is Not Equal)

When evaluating projects, the required rate of return (or the cost of capital) will be related to the risk of the project--the higher the risk, the higher the cost of capital.

What does this mean for 3He mining? Once we have passed the R&D phase, the cost of capital should not be extraordinarily high. It should be comparable to the cost of capital for electric utilities, fuel suppliers to electric utilities, and aerospace companies.

b.) Maxim 2 (The Time Value of Money)

This is the most important maxim for our purposes. It is illustrated in figure 1.

Figure 1

Figure 1 shows the cash flow needed in the future (in then-year dollars) needed to make a $1 investment today worthwhile. Note that if the pay-off is 20 years away and the cost of capital is 14%, the cash flow in 20 years must be $13.74 for every dollar invested today just to earn the cost of capital on the $1 invested.

The application to 3He is clear. Both investment in miners and launch investment earn returns over a 20 year period and the time value of money is very important.

Secondly, if we must make up front investments in R&D, there is a long lag before any payoff. So the time value of money is working against 3He mining.

To see the impact more clearly look at view graph 18 from lecture 37. Note that a large fraction of the cost of 3He which is profit and income taxes. Note that this proportion gets larger as the cost of capital increases.

c.) Maxim 5 (The Curse of Competitive Markets)

If some other producer of 3He exists, or there are producers of some other product in competition with 3He, there may be difficulties in earning the cost of capital. Figure 19 of lecture 37 illustrates this point quite nicely.

d.) Maxim 6 (Efficient Capital Markets))

The important point here is that investors will not supply the financing unless the expected return is commensurate with the attendant risks. This means that there are no secret ways to finance investments in space. Gimminks will not work as investors will always have alternates to invest in if they are uncertain about the proposed concept.

To paraphrase the muse who spoke to Kevin Costner in the field of Dreams,

"If you provide investors a good return, they will come"

Gerald Kulcinski

There are at least 6 main points that I hope the students will take from this course and these are outlined in figure 1.

Figure 1

When we think of resources from space, we need to think of them in a multitude of ways. For example, there are both energy resources and mineral resources (including non metals like H2 , H2O, etc.). In addition, we need to recognize that there are 3 main locations in which resources from space may be used. The most obvious (but maybe not the first) location is the Earth. Next may be in free space. Finally, there will be many uses on the planets or moons. The resources we now see falling into these categories are listed in Figure 2.

Figure 2

Harrison H. Schmitt

For the exam, I refer you to the two questions presented for your pre-exam preparation. They should help you integrate your knowledge in two major areas:

  1. The overall science and resources of the inner solar system, and,
  2. The engineering concepts that should be considered if the resources of the Moon are to be available to improve the human condition on Earth and in space.

In preparing for the "Resources from Space" lectures, I personally found my perspectives broadening well beyond even the original intent of course. This has been particularly true in two areas:

  1. The role that clay minerals probably played in the early history of the Earth and Mars and potentially in the development of early life forms, and,
  2. The importance of integrating the businesses of fusion technology, fusion electric power, and lunar mining in the same corporate structure if a largely private 3He initiative is to be financially attractive to investors.

I have been particularly impressed by the interest and enthusiasm of the class in the face of a daunting spectrum of issues and information that must be considered when examining the role that "Resources from Space" may play in the future of humankind.

I hope that this means that some of you may help make it happen during your careers, careers that will span much of the time to which we have directed our attention this semester.

If you take nothing else away from this course, I hope it will be a belief in your ability to tackle some very critical problems that will face you and your children during the next and succeeding centuries.

As a final note, we all want to thank the students for your active participation in this "experiment" and particularly for having patience with us as we were learning how to use the Web to better serve your educational needs.

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