Just over 200 years ago an American president initiated a program of exploration that sent two men to the Pacific Ocean. Fifty years ago, another  American president initiated a program of exploration that sent two men to the Sea of Tranquility. Fifty years after Lewis and Clark we had the California Gold Rush, and it was just another 16 years to the completion of the first transcontinental railroad with the Golden Spike. But fifty years after the beginning of the Apollo Program, the New Frontier of space has been trailing far behind the pace of the frontier of the American West. Why the striking contrast?

From the beginning, the effective goal of the US space program was to dominate this new frontier against Soviet incursions. Despite the costs, it worked. Until recently, whether by accident or by design, it has suited the United States for space to be expensive. As long as no other country or regional bloc could rival US expenditure on space, US supremacy was assured by these high costs, which have formed a de facto US strategy for space, even after the Cold War. In this sense, we are still living in the Apollo era of space policy. What should our “After Apollo” space policy be? Perhaps no US response is needed? Our pride may be hurt, but realism suggests that space really doesn’t matter. After all, space is a small industry. The entire global space industry, by its own Space Foundation estimates in 2007, and including the GPS chips so common in cell phones, amounted to just two-thirds of Walmart’s turnover.

On the contrary, US competitiveness is threatened, including in space, and this matters. The US government should respond by playing to the nation’s strength and play the same role in space in the 21st century, that it played in the development of the American West in the 19th century: making the frontier safe for capitalism. This is not a Cold War style argument that attempts to scare the United States into a renewed space program based on military fears. Rather, the United States has made a huge investment in space, and now has a clear technological advantage. As the Chinese and others catch up with the United States, that advantage is eroding. At some point, which could be in the near future, the value of space resources will become commercially exploitable. When that happens, will US companies be the ones reaping the rewards?

The formal goal of the US space program, for nearly 30 years and under both parties, has been, as George W. Bush, stated clearly: “to advance US scientific, security, and economic interests through a robust space exploration program.” Of the three elements of this goal—science, security, and economic growth—NASA has done a great job promoting a robust scientific program in space. Military security, from spy satellites to the GPS system, is also robust; the United States Air Force (USAF) and National Reconnaissance Office space programs form a US $20-$30 billion-year enterprise.

The third interest, economic growth in space, has not fared as well. In fact, as Jeff Greason, CEO of XCOR Aerospace has emphasized, we have had no coherent strategy to achieve that goal. These resources are vast, and could be harnessed to the great benefit of the nation. Space resources will benefit not only American citizens but, through the networks of global commerce, all the peoples of the world. A strategy for achieving economic benefit from space must involve both government and industry, as did the development of the American West.

Imagine that the United States had ignored the territories acquired in the Louisiana Purchase. At first, this was a hostile territory and much of it was considered a desert. Ignoring the American West might have left the Native Americans better off, but the United States would be radically reduced. Other European nations were then actively exploring the territory, as other nations are today exploring space. In the hostile territory of space there is, fortunately, no indigenous population to abuse, and we already know that the resources are there.

What are these resources? They have been discussed for years, and are expertly cataloged in John S. Lewis’s 1996 book, Mining the Sky: beaming solar power to Earth, mining the Helium isotope, helium-3, for use in fusion reactors, and mining asteroids for iron to use in construction in space, water for astronauts, and methane for rocket fuel. These are truly vast resources, with trillions of dollars in street value, and capable of solving today’s oil-based energy crisis. Policy makers have not paid serious attention to these resources, as they have seemed more like tales of El Dorado than real opportunities. The possibility that the United States may soon lose leadership in space means that we should reconsider the facts of the matter and make a reasoned choice, lest we cede the bounty by default.

Developing space resources means enabling profits to be made from them. The paeans to the value of space resources have almost all been written by scientists, not by business people. And we scientists are financially naïve; we add up the value of the resource, but ignore the cost of bringing that resource to the market, or even the existence of a market. There are, for example, no fusion reactors to fuel with helium-3. In space, the large capital costs and long payback time make it impossible to turn a profit from almost any of them, as J.H. Hickman showed in 1999. Hickman does point out, though, that if, for example, solar power stations in orbit were already built, they would be profitable, and the space economy could grow. Getting to that starting point is the problem. Historically, governments have been able to provide long-term infrastructure development as a way to lower the cost and risk barriers for private enterprise.

The one problem that outweighs all others is the forbiddingly expensive cost of access to space. Today it costs US$10,000 to US$20,000 per kilogram, just to get to low Earth orbit (LEO). It is a rare industry that can make a profit with cargo rates this high. This price has barely changed since Apollo, in constant dollars. Could the cost come down? Space is not inherently expensive. Of the US$50 million launch price for a Falcon 9 rocket from SpaceX less than one percent is the cost of the fuel. We don’t need new technologies, either. Jet airplanes have been around about as long as rockets to orbit, and a ticket from New York to Los Angeles costs about a tenth of what it did in 1960, in constant dollars. Incremental improvements driven by competition made this happen. There are some hopeful signs: there is a nascent space tourism industry. Virgin Galactic will soon offer short sub-orbital flights for US$200,000 a ticket. Early demand is brisk. The business plan to go from sub-orbital to orbit is not obvious though; it takes 30 times as much energy to reach orbital velocity. Bigelow Aerospace is developing commercial space stations. And Elon Musk’s SpaceX has announced plans to launch cargo to LEO for just US$2,000/kg. If realized, this would be a substantial price break. It is not enough to make space-based solar power pay off, however, which costs closer to $200/kg. After all, sunlight does come to the ground for free. Until there is an in-space market for iron, water and methane from asteroids, these resources cannot be profit centers.

We need to find a pump primer – some space venture that makes enough profit, on the ground, even at high access costs, to get the ball rolling. The profits will have to be as extreme as those of the luckier Gold Rush pioneers. It has to pay off right away, and so must have a very high price per kilogram. Does space have a ‘gold rush’ resource? The answer is a resounding “Yes. But…” In the Earth’s crust, gold, silver, platinum and similar heavy metals are rare because most lie out of reach in the Earth’s core, where they settled early on, when the planet was still molten. Only small amounts remain in the Earth’s crust, where they can be mined. As a result, some precious metals have prices of US$2000/oz, or US$70,000/kg. That’s a promising number compared with US$20,000/kg to launch, especially as a kilogram of mining equipment should bring back much more than a kilogram of ore.

But why go to space to mine them? Meteorites tell us that among the asteroids there are ores that are far richer than any mines on Earth. If we could find one of the smaller asteroids, just 200 meters in diameter, that was as rich in platinum and related metals as the richest meteorite, it would have a value of about US$30 billion, and provide nearly two year’s production of platinum at current levels. This is encouraging. The technical difficulties in bringing the ore back to Earth profitably are large, but perhaps not insurmountable. So: Yes. The platinum group metals (PGMs) could be the pump primers we need to build a profitable space economy.

What about rare earths? Strategically, the near-monopoly on rare earth production by China is a concern to other nations, as the recent sharp spike in prices has shown. Rare earths, however, are poorly named, as they are not particularly rare, just hard to mine. Normally the most expensive rare earths command only about a tenth the price of platinum, so they would not be profitable as a space venture. However, the strategic lesson is good. If demand for hydrogen fuel cells takes off for powering automobiles, then the demand for platinum could multiply several-fold. US strategic interests would be well served by ensuring a commercial supply from asteroids.

But, US$30 billion is not a big enough number, given the costs and risks involved. There have been, over the years, numerous articles studying the problem of mining the asteroids for PGMs. Jeffrey Kargel in 1994, Mark Sonter in 1998, and others, in scattered literature, have laid out the technical and economic challenges. In 2001, Sonter and Shane Ross began to set out the costs to determine whether a profit is likely. High risk, long term, venture capital requires at least a 20 percent per year return. That is, if I invest US$5 billion today I need roughly a US$30 billion return in 10 years (actually US$31 billion), with a high chance of success. US$5 billion is not an outsize investment for a new mine, but the risks and rewards are far better known on Earth, so today the likely profit from an asteroid mining venture is negative.

Bringing down this risk and cost barrier is where the US government can play a historic role. As Hickman says:

“Capitalization is a crucial problem for these projects because the total capital investment required is very large and the investment takes a very long time before producing economic returns. Very large space development projects are best understood as massive public works projects that are necessary to open frontiers. Despite the libertarian sentiments in much of the popular science writing on very large space development projects, government would likely have to play a large role in capitalizing such projects.”

Strategic government investment could “buy down the risk” over the next decade so that a venture capitalist could reasonably undertake an asteroid mining enterprise. This is a role the US Government has played well in the past, notably in the development of the American West. The late historian of the West, William H. Goetzman laid out the interaction of government and private enterprise in his masterpiece Exploration and Empire. From the Lewis and Clark expedition, through the detailed geological surveys, establishment of legal rights, security, land grants, and the development of infrastructure in the form of the railroads, the US government was highly involved in enabling the pioneers and prospectors who developed the American West.

This tells us that the United States can best respond to the international challenge it faces in space by playing to its strong suit: it is time to unleash capitalism in space. Modest efforts along this line have begun. NASA’s commercial crew vehicle program has just awarded US$275 million, somewhat over one percent of its budget, to develop private sector launch services. But because we have lacked a clear strategy, our legislators have not so far embraced this approach whole-heartedly. An earlier NASA commercialization initiative has paid off. SpaceX developed the Falcon-9 launcher and Dragon capsule for just US$600 million, and first launched them in 2010. They have a NASA contract to resupply the International Space Station, starting in 2012. The prospect of new profits engages creativity in space, as it does everywhere else.

Myriad Details & Thorny Questions

A program as large as taming a new frontier, be it the American West or space, involves getting many details right, and resolving numerous difficult issues. The economic development of asteroids, and of space resources in general, will take a wide range of skills. I outline some of them here, in five categories: technology, economic and market analyses, issues of law, justice and policing including property rights, ethics, and coordinating private and public efforts.

NASA is well positioned to create some of the necessary infrastructure, mostly by supplying new technologies. Other agencies, such as the Department of the Interior—via the US Geological Survey—will have expertise to contribute too. Many technologies overlap with NASA’s current goal of sending humans to an asteroid, so there will be little need for alteration of priorities. Others are driven by the specific needs of economically viable asteroid mining, and will be new to NASA. Some of these technologies will make use of the International Space Station, injecting new purpose to its mission. President Jefferson carefully gave both specific and general instructions to Lewis and Clark. We too should consider the larger picture in the execution of our program. This larger picture will put a new emphasis on other factors. For example, shorter flight times have higher priority. Interest payments on a US$5 billion loan impose a strong “time is money” imperative.

While the technological challenges are many, it is possible to outline a strategy to address them. Initially, astronomers will be needed to map out the territory, as only 10 percent of the nearby asteroids have been found so far and even fewer have known composition. Then space and mining engineers will need to test out ways to mine in space economically. Economists, mining companies, and marketing experts will need to make refined estimates of profitability, in the face of fluctuating prices and changing markets, and likely PGM recovery rates from asteroids. Economic considerations will have technical repercussions: the relative importance of accurate robotic assays will rise, for example.

Diplomats and international lawyers will need to establish a hospitable international legal framework. To Europeans, the Louisiana Purchase gave the United States a legal claim to the West. In space no state has any claim. Effective US sovereignty over the Louisiana Purchase was tenuous for quite a while, and was contested over large areas by Spain and Britain. The US response was active and multi-formed, and included, for example, legal licensing of trappers in the territory. The existing 1963 United Nations “Outer Space Treaty,” or the Declaration of Legal Principles Governing the Activities of States in the Exploration and Use of Outer Space, is completely oriented toward the “common heritage of mankind” principle. This means that it is impossible to own a celestial body, at least de jure. This is a major disincentive to any venture capitalist, as their expenditures may be lost if the goods they return are forfeit. Virgiliu Pop, in his 2009 book “Who Owns the Moon?” argues that the “good of mankind” principle prevents the profitable use of space resources, and that establishing ownership de facto is the most likely route that resource development will take. He cites Locke, who argued that private development of land left “waste in common”, “does not lessen, but increase the common stock of mankind.” Such arguments have become dubious on Earth, as we realize the finiteness of its resources, but in space such limits are very distant indeed.

Once a single profitable asteroid mining venture succeeds, it will start an “asteroid rush”. The best ore-bearing asteroids will then suddenly become highly valuable properties, and all the usual legal, policing, and justice issues that apply in a gold rush will come into play. Central to a venture capitalist’s concerns are property rights. How could a company establish a mining claim? How can anyone own a piece—or all—of a celestial body? Are asteroids even “celestial bodies” under law? After all, if you can move it, is it still celestial? A Keck Institute for Space Studies report coming out soon will show that a small asteroid could be moved from its orbit around the Sun to an orbit around the Earth, so this is not a hypothetical or purely academic question. Is it enough to do a private survey? To land on an asteroid and plant a flag, as Westfall et. al have pointed out with terrestrial continents? Or is it necessary to return an ore sample to Earth? Is the whole asteroid claimed from a tiny sample? What if the asteroid is 1000 km across? How could claims be enforced? What if a rival alters the asteroid’s orbit to hide it? Is there a penalty? Once there are repair crews, to tend to the expensive mining equipment, there must be safety rules and emergency services. Public safety is a question too. If an enterprise moves an asteroid towards Earth for easier processing, what rules must they follow to avoid the “environmental impact” of an unintended crash onto our planet? If a piece of mined material lands in my back yard, does it become mine? Who gets to tax asteroid mining, and what are the most beneficial taxation regimes?

Establishing these rules will be a busy and necessary occupation for both diplomats and lawyers. Any rules we set up beforehand will surely need modifying as the exploitation of space resources grows. Remember that platinum group metals are just the pump primer. The tailings from mining them will include ultra-pure iron, already separated and ground into small grains suitable for in-space use at low incremental cost. But these essential preliminaries will help guide actual development and prepare our understanding of the options.

There are ethical issues too. Asteroid mining will destroy pristine environments containing clues to the early solar system, and possibly to the origins of life. If we grind up these asteroids for profit, will we have lost something as special as the Amazon rainforest or the Arctic wilderness? This is not a purely altruistic consideration; there may be materials on them of great potential value, but of which we are now ignorant. Take for example, quasicrytals. These are strange new materials, for which the 2011 Nobel Prize in Chemistry was awarded. The only naturally occurring quasicrystal found to date may well have come from an asteroid. How do we avoid Garret Hardin’s “Tragedy of the Commons?” Here the history of the American West is not a good guide for us. Indian Treaties were routinely worthless as soon as a hint of valuable resources was discovered in their territories. Can we, or should we, try to create the space equivalent of the far more successful National Parks? Who would serve as trustees for these parks? The United Nations? A seemingly mild proposal to reserve the Saha crater on the far side of the Moon for radio astronomy has already proved difficult. As Karen Cramer notes, “mining, astronomy, geology, solar power, manufacturing and landing rights are not all compatible.”

President Obama’s new National Space Policy (2010) directs NASA to “pursue capabilities, in cooperation with other departments, agencies, and commercial partners, to detect, track, catalog, and characterize near-Earth objects to... identify potentially resource-rich planetary objects [emphasis added].” The various activities that this commercial space focus elicits across the agencies of the US federal government requires coordination. The Department of Commerce already has an Office of Space Commercialization, though it is small. Extending federal interests to asteroids will require, at a minimum, an Inter-Agency Working Group, including Commerce, State, Justice, Department Of Defense , Interior, Transport and, of course, an economically re-purposed, re-focused NASA. To involve a wider range of actors, beyond the federal government, a Presidential Commission, like the 2004 Aldridge Commission, which defined the G.W. Bush Vision for Space Exploration, could be created. Such a commission could also draw on the expertise developed over the past decade by private US studies, for example at the Colorado School of Mines “Space Resources Roundtable”. More permanent institutions that support and regulate this vast new resource regime should, perhaps, wait until its specific needs emerge and are better understood.

Enacting a Capitalist Space Policy

President Obama has called for NASA to send astronauts to an asteroid by about 2025. As he said “in fulfilling this task, we will not only extend humanity’s reach in space -we will strengthen America’s leadership here on Earth.” But the President’s call has met a lukewarm response. The problem, I believe, is the lack of a “Why?” Why go to the asteroids? The 2009 Augustine report, “Seeking a Human Spaceflight Program Worthy of a Great Nation,” argued that the asteroids are valuable as stepping-stones to Mars, better than the Moon in various ways. But putting humans on Mars is so distant, and is only interesting as a prelude to settlement. And settlement is not particularly compelling for many. So the President’s program has had only mild appeal. The uncertainty over the value proposition of NASA today—given the end of the Shuttle, the current Federal budget crunch, and the ongoing arguments over free markets vs. public (cost-plus) development strategies—undergirds this weak public response. NASA’s US$18 billion budget seems large when it supports pure science and space spectaculars. But considered as an infrastructure investment to open up great economic possibilities, it is quite modest.

Redirecting NASA’s priorities towards a strategy of developing space resources for commerce may have a better chance of engaging the public and industry. And once profits flow, who needs public enthusiasm? Profitable asteroid mining ventures will be self-propelled, and will pay taxes. Within a decade or so, NASA can reduce the cost barriers to commercial exploitation of asteroids to a level that venture capital will be a viable path forward. Once a profit making industrial apparatus is in place, the government can step aside from that aspect, even as its role in the legal and diplomatic side of space capitalism will increase. Put simply, enabling profit should be the centerpiece of a 21st century national space policy.

Like the Apollo program, the Ming dynasty fleets of the early 1400s projected sovereign power, but they were costly, and brought no economic bounty. Bureaucrats argued that there were more pressing needs at home, and the fleet was dismantled. The challenges to Chinese seafaring supremacy were far closer than they imagined. Today, we know better about space, but we have to change our model. NASA’s first goal, as already legislated under President Reagan, in a 1985 update to the 1958 Space Act, is to “seek and encourage, to the maximum extent possible, the fullest commercial use of space.” With the challenges now arising to the nation’s economic leadership in space, the United States should organize a strategy around this established, but under-implemented, goal. US led capitalism in space can bring unprecedented benefits down to Earth for all its inhabitants. A far-sighted leveraging of government development, like that of Jefferson and the West, will let US capitalism lead economic development of the space frontier.