Section 3 is the Market Assessment/Market Analysis section, it contains the following sections:
3.1 Communications Market 3.2 Space Manufacturing 3.3 Remote Sensing 3.4 Government Missions 3.5 Transportation Missions
3.6 Entertainment 3.7 New Missions 3.8 Space Utilities 3.9 Extraterrestrial Resources 3.10 Advertising

Table of Contents for Section 3.7

3.7 New Missions
3.7.1 Introduction
3.7.2 Space Debris Management
3.7.3 Space Medical Facilities
3.7.4 Space Hospitals
3.7.5 Space Settlements
3.7.6 Multiuse LEO Business Parks
Footnotes
The Full Section Index is at the end of this Section

Commercial Space Transportation Study


3.7 NEW MISSIONS

3.7.1 Introduction

3.7.1.1 Results Summary

The CSTS new missions category was established to recognize the existence of other areas of potential future space activity that did not fit easily into the other nine categories. The missions in this category include:

  1. Space debris management, examining the market potential of mitigating the impact of orbital debris.
  2. Space medical facilities, looking at the use of in-space facilities to provide unique medical treatments.
  3. Space hospitals, examining the potential of an in-space site to treat and cure patients, including extended stays.
  4. Space settlements, capturing the popular idea of large human habitations in orbit.
  5. Space agriculture, representing the potential for agricultural activities in space.
  6. Space business park, representing a multiuse commercially oriented facility in Earth orbit.

Many of these new missions address uncertain markets, and while they may have worthwhile missions, they may require very low transportation costs (well less than $100/lb to LEO) to be commercial viable. The only mission area that was evaluated as having substantial commercial viability was the space business park, representing a commercially oriented, multiuse facility in LEO. The space business park was estimated to have a commercially viable market rate of return at about $560/lb to Earth orbit, achieving a 20% internal rate of return (IRR) after 10 years of operations.

3.7.1.2 Associated Market Segments

Based upon market area brainstorming, reviews of the literature, and contacts with potential users, six different market areas were included in this category.

  1. Space Debris Management. Orbital debris is becoming more and more of a significant problem in space operations. As future space operations increase, this problem may be expected to grow. This market area examined the market potential of mitigating the impact of orbital debris, including the market viability of dedicated debris removal systems. However, the market assessment showed that for LEO operations, this market may most effectively be addressed by regulation and additional shielding on LEO systems. No significant space transportation demand was identified for this market area.
  2. Space Medical Facilities. Based upon market contacts, several promising medical treatments that used the space environment (primarily microgravity) were identified. However, there is large level of uncertainty in the use of these treatments, based upon a lack of clinical or experimental data on them. Furthermore, to ship a patient to space and provide the treatment on orbit at rates equivalent to terrestrial costs would require launch costs, of $100/lb or less.
  3. Space Hospitals. This market area was assessed to be very similar to the space medical facilities, except that long-term care would be provided to patients in an in-space facility. Again, to ship a patient into space and provide a long-term stay on orbit at costs equivalent to terrestrial costs would require launch costs of $100/lb or less.
  4. Space Settlements. Representing the popular idea of large human habitations in space, this market had the weakness that the participants of the large habitats needed some occupation and the settlement needed some cash flow to justify market investment and support. Such cash flows could only be found if other large-scale space business activities, such as solar power satellite (SPS) construction in GEO, were underway. Based upon the market area potentials for these other areas, the assessed market for space settlements was determined to occur with transportation systems cost well under $100/lb to orbit.
  5. Space Agriculture. Initially, this market area was conceptualized as a large in-space facility providing high-density and high-intensity agricultural production. As with the space settlements market, this venture would require other very large in-space business activities to occur before justifying this market area. Based upon the market area potentials for these other areas, the assessed market for space agriculture was determined to occur with transportation systems cost well under $100/lb to orbit.
  6. Space Business Park. Conceptualized to represent a multiuse commercially oriented facility in Earth orbit, this market area was identified from the preliminary results of several market areas that did not generate enough revenues by themselves to justify a separate space facility. As an aggregate of this market area's demand, it was assessed that a multiuse, commercially oriented space facility could be a viable commercial venture at launch costs of greater than $560/lb to orbit.

3.7.1.3 Assessment Approach

The overall assessment approach for this market area followed a two-pronged approach. The first path identified data to assess the current status and market forces for the particular area. These included contacts with potential users in the market area, identification of key players and regulators in the market, competing technology for the space market areas, and market factors that might drive the feasibility and competitiveness of a space solution.

The second prong of the assessment approach was to develop a business and technical feasibility model of potential ventures in this business area. In particular, these models were developed to answer the question, "Is this approach a good business deal?" (That is, Does this approach fit within current business ranges for investment size and returns?) As part of this approach, technical feasibility assessments were performed on the market concepts assessing if the project could be built and launched; identifying critical technology developments needed; and examining the production/engineering/technology resources needed for the business venture to see if they will be available in the time period considered.

To be included in the market projection, each market area assessed had to show business and technical feasibility for the market area - and match the market survey data such that there was some level of validation from the surveyed market data to establish credibility of the projections for the future market opportunities. From these assessments, sensitivities to market and technical assumptions were examined and a threshold cost, below which space transportation had to provide an acceptable rate or return, was determined.

3.7.2 Space Debris Management

3.7.2.1 Introduction/Statement of Problem

Near-Earth orbits contain a great deal of space junk, including discarded upper stages, dead satellites, and pieces of antisatellite weapons. The amount of debris (6,600 individual objects tracked by NORAD) is so great that it threatens to multiply through self-collisions. It is certainly technically feasible to identify, target, rendezvous with, and reenter the larger objects, but is it a commercially viable venture? Who will pay to remove the debris? Most of the debris is unclaimed and without ownership. If there were sufficiently valuable assets in LEO, then the owners might collectively pay to have a major threat removed as a kind of insurance against catastrophe.

The market for space debris management appears primarily driven by:

  1. Removal or negation of space debris that could pose a hazard to other space assets.
  2. Removal or negation of other systems that could develop into a space debris hazard, such as spent rocket stages or satellites that have exhausted their attitude-control propellant.

The sizing of the market for space debris management is determined by several factors, including:

  1. The amount of activity in regimes affected by debris.
  2. The effectiveness of international regulatory controls upon space debris-producing events.
  3. The technical capability of removing debris or negating possible debris sources, including use of terrestrial-based systems.

The assessed primary customer for this market area is governmental organizations, although the possibility of an insurance-funded system has been raised. This future market is highly dependent upon the above market factors.

3.7.2.2 Market Evaluation

The assessment approach used to evaluate this market area was:

  1. Use of brainstorming sessions to generate market concepts and customers.
  2. Review of current literature to establish rough market sizing, forces, and prior data for market areas.
  3. ROM market analysis to establish preliminary market impacts.
  4. Examination of how a future low-cost space transportation system could affect these markets, including the size of the projected demand.

The primary driving force in this market is the desire of space operators to remove potential threats to their space systems. As economic activity increases in space (including for governmental purposes), risks also increase. Sources of debris multiply, greatly increasing the debris flux experienced by assets in orbit. This creates an economic risk from space debris, which is in turn dependent upon the debris flux and the amount of assets placed in the regions at risk. Other market forces include the ability to control events that contribute to space debris, such as regulation of space systems to prevent events that might cause an increase in debris and the technical cost and relative capability of a technical solution to remove or negate debris risks.

From discussions with market players and the CSTS assessment activity, probabilities for this market area will be two-pronged. First, regulations will be imposed upon space systems to reduce the number of space debris-causing events. The current rate of growth in debris (footnote #1)is estimated at 2% annually, and while such regulations will reduce the rate of change at which space debris is produced, they will not reduce existing debris. For a ROM market assessment, it is assumed that the regulations will reduce the rate of growth in orbital debris to the current 2% level, regardless of increase space systems usage.

Second, protection against debris is presumed to be done in the simplest method possible. Passive protection systems are preferred over active debris removal systems, unless there is a clear economic advantage for the active system. Debris in low-altitude orbits will be gradually swept out by atmospheric drag. It is assumed that the debris in low-altitude orbits will not substantially increase relative to the debris in higher orbits.

Last, it can be assumed if space transportation costs decrease, the mass of a satellite can be increased to provide additional debris shields. The cost of manufacturing these shields and adding it onto the spacecraft is expected to be much less than that of the transportation cost and significantly less than the core spacecraft $/lb to fabricate (footnote#2). By first approximation, the cost of adding additional shielding to reduce the current level of debris protection is negligible, if space transportation costs decrease. This was assumed to be the high-probability demand market case.

If additional shielding is added to increase the current level of debris protection, this may be done at a reasonably low cost. A sample calculation based upon orbiter databases, LDEF data, and the orbiter debris impact methodology shows in the worst case that to reduce the probability of debris penetration by 10 times requires an increase in the thickness of the frontal shield by 2.5 times (footnote#3). (Note: this is the frontal surface area; other sides are significantly less, and the impact on the total mass is dependent upon the volume, not area.) This implies that the cost of the surface shielding would increase by 2.5 times.

Using the parametric modeling data for the impact of low-cost space transportation upon satellite system design (ref: Boeing parametric data), it was estimated that the overall mass of the satellite would increase by a factor of 2 (not including this increase in shielding mass), and the cost of the satellite would decrease by 5 times. Current spacecraft cost $40,000/lb (and up) for hardware, which would indicate a decrease to about $4,000/lb for an order of magnitude decrease in space transportation costs.

It should be noted that orbital debris shielding is typically a very simple multilayer metallic wall design. The initial impact of the debris upon the outer layer of the debris shield vaporizes the incoming debris particle (and a small part of the outer layer of the shield) as the kinetic energy of the incoming debris particle is dissipated. The second layer of shielding stops this vaporized remainder of the debris particle. It is possible for the incoming debris particle to have sufficient high mass (and energy) to punch through the shield, but the vast preponderance of debris particles is quite small, and the fewer more dangerous particles can be tracked, their impacts predicted, and a space facility maneuvered away from a potential impact.

Whereas the additional mass to increase the orbital debris shielding is primarily simple structure, this indicates additional shielding will cost relatively little for a much lower $/lb to acquire and manufacture the shield. This is particularly true with larger satellites where the cube/square relationship of enclosed volume-to-surface area dominates the overall mass of the satellite. Adding another pound of shielding is relatively small in a large satellite where the average cost per pound of satellite is an order of magnitude higher.

This provides the basis for the high-probability and medium estimate of the demand for space debris management activities. At high probability, regulatory actions will occur to decrease the generation of space debris. Current space system designs include debris shielding, and for a conservative high-probability estimate, it can be assumed that there will be no increase in satellite mass other than volume to decrease unit cost. At medium probability, an increase in the space debris flux can be accommodated by a slight increase in the satellite mass, but natural debris removal mechanisms in LEO would discourage buildup to permanently high levels before the regulatory system would be able to implement controls. Therefore no significant increase in space debris control systems is projected for the medium-probability demand markets.

For a low-probability estimate, several active debris removal systems have been proposed footnote#4, but the use of such systems is limited due to the wide dispersion and low density of space debris (~ 6,600 objects greater than 1 cm diameter in all of Earth orbits) and the difficult technical challenge of developing a system that can capture or destroy large pieces of debris with significant kinetic energy without rendezvousing with them. Similarly, these systems would have to overcome cost-effectiveness barriers since the probability of a major impact upon any single satellite is quite small, reducing each individual market participant's desire to pay for a space debris removal system. The cost of a specially built system to address this problem would be in the range of $200 million or higher, depending on the specific design of the system. (This is derived from a ROM estimate developed for a one-of-a-kind system massing about 10,000 lb in LEO, based upon current satellite hardware and transportation costs.) If such a system were proposed, it would probably focus upon sweeping out an economically valuable region and then relying upon regulatory processes to maintain the cleared volume free of additional debris.

Based upon brainstorming and contacts with experts in the field, a low-probability market projection might be a set of three debris removal satellites - one at LEO, one in GEO, and one in a high polar orbit. Sizing of these systems, based upon the orbital sweeper concept from the NASA Johnson Space Center, would range up to approximately 60,000 lb in LEO equivalent mass footnote#5. Assuming these systems operate upon a 10-year replacement cycle, this translates into an average of 6,000 lb in LEO equivalent mass per year.

This yields a ROM projected market as outlined in Figure 3.7.2.2-1


At current space transportation costsAll probability estimates:
No increase in transportation mass demand, due to no increase in satellite launch mass, but regulatory actions to decrease generation of space debris.
At one-tenth current space transportation costsHigh- and medium-probability estimate:
No increase in transportation mass demand, due to no increase of satellite launch mass for shielding increase, but regulatory actions to decrease generation of space debris. Low-probability estimate: An average of 6,000 lb/year to support an active debris sweeper system.

Figure 3.7.2.2-1. Projected Market for Space Debris Management Market Area

3.7.2.3 Market Infrastructure

This market can be served by the same infrastructure in place for other mission areas. In the high- and medium-probability markets, there is no demand. In the low-probability demand model, the active debris removal systems could use existing infrastructure elements such as upper stages and launch processing and control systems.

3.7.2.4 Prospective Users

The assessed primary customers for this market area are governmental organizations, although the possibility of an insurance-funded system has been raised. An individual’s risk is fairly small in any year for a space debris hazard; however, in aggregate, risk is significant. Mitigation from these infrequent but highly consequential events is typically performed either by the largest user with the greatest assets at risk (currently the government) or through an insurance company acting as proxy for numerous individual users.

Prospective users contacted in this market survey included :

  1. Satellite manufacturers (see App. B.2).
  2. LEO space business park potential developers and users (see Sec. 3.7.6 below).
  3. Andrew Petro, NASA JSC (designer of space debris removal vehicle, U.S. Patent 4991799).

3.7.2.5 CSTS Needs and Attributes

No unique CSTS-specific system requirements were generated from this analysis. A system offering similar capabilities and services to current transportation was sufficient.

3.7.2.6 Business Opportunities

There is virtually no new business opportunity for space debris removal systems, even at very low transportation prices. At the low transportation prices, the cost of additional shielding is substantially less than a dedicated system for space debris removal. If additional shielding is added, this mass and cost are very small compared to the overall mass of launching new space systems. Even in the lowest probability demand model, only 6,000 lb of mass on the average is projected if space transportation costs were reduced by a factor of 10.

3.7.2.7 Conclusions and Recommendations

This market area was defocused due to a lack of sufficient market demand.

3.7.3 Space Medical Facilities

Vision statement: In the year 2010, 0g facilities exist in LEO for the treatment of heart disease, pulmonary diseases, and severe burn patients.

3.7.3.1 Introduction/Problem Statement

Space medical treatments were identified in some of the initial brainstorming sessions as a potential market for a new low-cost, space transportation system. Health care is a trillion-dollar industry worldwide and if the space environment can be successfully and affordably used to treat life-threatening or debilitating diseases, then space medicine could become a major driver for low-cost space transportation.

3.7.3.2 Assessment Approach

The medical field was divided into categories that might be future markets for in-space treatment, and then demographic studies were performed to estimate the U.S. market demand (in number of procedures and patients). In parallel with this effort, direct contact was made to specialists in these areas to obtain direct information on how such treatments could use the space environment. These direct contacts included some brainstorming sessions regarding the use of the space environment for medical treatments with experts in the field.

First, general statistics were gathered concerning illnesses and injuries that affect a large portion of the population and/or require long hospital stay times, expensive surgery, or expensive simulations of the zero-gravity environment of space. Then, those areas were further examined to predict the benefits and drawbacks to treating those patients in space. Some of the areas that are promising enough for further consideration are heart disease, pulmonary diseases, orthopedics, burn patients, physical therapy, rehabilitation, and quality of life (retirement in space). Each of these areas requires extensive research, which may also prove to be beneficial to patients on the ground. Pure medical research is the most promising area to apply to space, especially in cancer research and HIV research.

The field of medicine is quite extensive with an overwhelming number of areas to consider. To obtain a broad spectrum of medical applications for space, it was necessary to be in contact with many different specialties of medical personnel. Several excursions were made to hospital facilities and general statistics were obtained from major insurance companies and local hospitals. In this way, it was possible to estimate costs for running a medical facility in space and compare this to treating patients on the ground.

There are several adverse effects on the human body from space flight, such as muscle atrophy and calcium loss, that can be counteracted to some extent by exercises and conditioning. Several opinions have been obtained about the benefits for patients who are treated in space, assuming that proper countermeasures for the adverse effects are applied. Some areas, such as treating AIDS patients, were not extensively considered because it was reasoned that those patients would not benefit from a space hospital any more than a ground-based one.

3.7.3.3 Market Description

Although some of the major areas of application of the medical sciences to space are not included in mortal illnesses or injuries, it is helpful to see which diseases or injuries are the primary causes of death in the United States. Figure 3.7.3.3-1 has nationwide statistics on the leading causes of death.
Cause of deathNumber of people affected
1. Heart disease765,156
2. Malignant neoplasms (cancer)485,048
3. Cerebrovascular diseases150,517
4. Accidents (mostly motor vehicle)97,100
5. Chronic obstructive pulmonary diseases82,853
6. Pneumonia and influenza77,662
7. Diabetes mellitus40,368
8. Suicide30,407
9. Chronic liver disease and cirrhosis26,409
10. HIV infection16,602

Figure 3.7.3.3-1. Ten Leading Causes of Death in the United States (1988)

The table above gives a pretty good idea of the leading causes of death in the United States; however, it does not go into the diseases or injuries that would require patients to be hospitalized or the prevalence of the cases.

3.7.3.4 Market Evaluation and Assessment

Heart Disease.
The number of people who are potential candidates for a cardiovascular intensive care unit in space was determined for two groups of patients. The first group are those patients who require a coronary bypass, and the second group are those who require a heart transplant. The numbers are shown in
Figure 3.7.3.4-1 by financial status. Note that current costs for a coronary bypass is about $25,000 and a heart transplant around $100,000 (these prices are based upon market contacts).

As Figure 3.7.3.4-2 shows, a large proportion of ailments treated at hospitals is for heart disease treatment; however, space hospitalization for injuries may also prove beneficial.


Coronary Bypass Patients
Income per Procedure
Potential Space Market Size
Procedures per Year
$50,000
100,000
250,000
500,000
1,000,000
2,000,000
133,268
21,967
2,973
875
330
160
Heart Transplant
Income per Procedure
Potential Space Market Size
Procedures per Year
$50,000
100,000
250,000
500,000
1,000,000
2,000,000
808
133
18
5
2
1

Figure 3.7.3.4-1 Market Size for Cardiovascular Patients Treated in Space

Disease NameMortalityPrevalenceHospitalizations
Coronary heart disease593,1117,191,0001,615,320
Stroke159,2042,714,000660,750
Diabetes37,1785,547,000473,863
Chronic obstructive lung disease71,09914,786,000743,089
Malignant Neoplasms (cancer)
Breast cancer
Colorectal
Lung cancer
Cervical cancer
485,048
40,415
55,811
125,511
4,543
-
139,816
-
147,771
12,625
-
202,975
195,785
283,504
36,342
Chronic liver disease26,151- 66,325
Trauma
Spinal cord injury
Burns
Limb injuries
150,000


~57,000,000
15,000
160,000
-
~2,000,000
-
80,000
1,000,000

Figure 3.7.3.4-2 Chronic Diseases (1989) and Injuries (1992) Prevalent in the United States

Orthopedics.
Many injuries would benefit from in-space care.

Spine and disk - One area that may be helped by the 0g environment of space is in spine and disk injuries or diseases and bone quality.

  1. Symptoms and Treatment. Some spine or disk problems may take a year to heal with physical therapy sessions two or three times a week. In particular, many of these treatments deal with building up muscles and spinal tissue to handle the full forces from the terrestrial 1-g field. Physical therapy includes posture and stabilization exercises and low-impact aerobics. Often the conditions of 0g environment are mimicked in order to reduce the stress on the spine from a person's body weight.
  2. Support personnel required. A physical therapist and nurse's aide would be needed.
  3. Space Application. In a space medical facility it would be possible to have that same person doing physical therapy and exercise to increase the support strength of the back muscles while allowing the trauma of the injury to heal without the pressure of 1g. Part of the physical therapy regime is low-impact aerobics, which could easily be carried out in a wide variety of ways if the patient could undergo treatment in space.

Fractures - It is not yet known whether weightlessness impedes or helps the healing process. Recent Spacelab life science experiments (yet unpublished) will provide initial data in this area.

  1. Symptoms and Treatment. Clinically it has been found a bone will heal itself faster if it has to carry weight (Wolff's law). However, in many cases, placing the full weight of the patient upon the fracture will produce further injury until the bone achieves some level of healing. In ground-based hospitals, the broken bone is often immobilized in bed rest because the weight of the person is too much for it to handle. Patients are also treated by supporting the fracture to allow mobility. The bone is only slightly stressed in this case and tends to heal better. The advantage of a space-based treatment is that the amount of weight placed upon the fracture may be varied over a complete range from 0g to full weight.
  2. Support Personnel Required. A technician trained in setting fractures, an orthopedic doctor, and a physical therapist are required.
  3. Space Application. If that same fracture were to be treated in 0g or reduced-g in space, then it is hypothesized that the person would be able to keep up mobility and a small amount of stress on the bone without overwhelming it, to encourage a faster healing time.

Burns - Burn patients, especially severe cases, seem to be the category that would benefit most from the 0g environment.

  1. Symptoms and Treatment. Burn patients with severe burns over a large percentage of their bodies need immediate fluid resuscitation to replace the fluid that their bodies lose rapidly with skin loss. Some patients are flown into burn units from remote areas in order to receive adequate care. After about 72 hours, when they have been stabilized, the patients begin physical therapy to keep up their mobility. The discomfort of burn patients with severe burns over a large percentage of their body is immense. Special particle beds are used to apply as little pressure to the patient's body as possible. Skin grafting procedures also begin right away, grafting approximately 10% of the body in one session. These surgical procedures continue about once a week until the burned area has been adequately grafted. Physical therapy continues during this period in order to maintain the range of motion of the patients as the skin grafts "take."
    Because circulation is poor in the extremities of a burn patient, the blood often pools, causing discomfort and sometimes bleeding under the skin grafts. Once bleeding occurs under a graft, the graft will usually not take. More surgery is then required to repair the damage. After several weeks of grafting surgery, and once the grafts have taken, physical therapy is intensified to keep the new-forming scar tissue supple and stretched out. For a few months, the painful process of stretching out new scar tissue must be strictly implemented. Patients must see a physical therapist two to five times weekly in order to keep up mobility and range of motion. Special pressure garments are worn to shape the scar tissue correctly and provide support for the internal structure.
  2. Support Personnel Required. A surgeon, physical therapist, dietitian, psychologist, and nurse's aide are required. Burn patients pay up to $2,500/day in the burn intensive-care unit.
  3. Space Application. In the 0g environment of space, the first benefit that is realized is the increased comfort of the patient. Burn patients could be anchored in place with minimum surface area touching anything but air. Once the patients are stabilized and the skin grafting is begun, 0g will allow the surgeon to manipulate the patient much easier and less harmfully during surgery. In space, it has been noted that the blood comes up into the chest area rather than staying in the lower extremities, so patients would not have the trouble of blood pooling in the lower legs and causing bleeding under grafts. It is hypothesized that more grafts will take, requiring fewer surgical procedures, and the grafts will cause less scarring because they will stay on with less stitching. In 0g, patients can begin physical therapy at once, beginning with mostly range-of-motion exercises while the patient is still extremely weak, and then doing cardiovascular exercise soon after. When scarring begins, the patient could stay in 0g for continued physical therapy or go to a reduced gravity module and then to a full-earth gravity module in preparation for the return to Earth.

In all the categories above, the main market drivers are cost and patient needs. The cost to treat patients in space must be compared to the cost on the ground, and then it must be determined if the patient benefits are great enough to justify the extra cost. That is, would insurance companies pay the extra money for clients to have better medical treatment in space? But, as stated previously, the main difficulty with assessing the potential for this market is the very limited database upon treatment of ill persons in space. It is hoped, however, that this study will be able to target potential markets where additional research in space medicine can be performed.

The cost of a 1-week stay in an orbital facility can be estimated to be in the range of $100,000 to $600,000 per week, depending upon transportation cost. The space business park analysis in this market area (Sec. 3.7.6) developed a cost of about $600,000 for a 1-week tourist ticket at about $560/lb, including one staff for every four visitors. This can be taken as a representative level of cost for a patient. Using this number as the basis for estimating space traffic demand for space medical procedures indicates a very limited market of a few high-cost procedures per year.

This market was assessed as low probability. There are too many unknowns remaining, primarily driven by the lack of a database on ill or injured patients in a space environment, to include in the high probability or medium probability cases. But there remains enough potential to include a low probability case of a few patients, in the range of one to five per year. Since these numbers are much less than that of the space tourism medium-probability model of a few hundred per year (see Sec. 3.5.6), these numbers are assumed to be included in that value. No separate line in the demand model is shown for this market area.

3.7.3.5 Prospective Users

The biggest market enabler for space medicine is research. There has been little research done in space that could lead to treating patients in space. If research can be done it will more clearly show patient benefits or drawbacks, and it will illuminate potential markets that right now are invisible because of lack of knowledge. If research can be done on the musculoskeletal system, for example, then there will not only be knowledge that will help for sending patients to space, but there will also be applications to Earth medicine. There are still significant unknowns in the medical field, and research in space can provide key insights into understanding the human body as a whole.

By taking it out of the Earth's gravity field, a new wealth of information about the human body can aid doctors in treating diseases on Earth. A second enabler in the market for space medicine is the backing of the medical community. At this time, there is very little interest or knowledge in the medical community in space medicine and a lot of skepticism. However, the initial market contacts conducted in this survey indicated this level of interest is driven by unawareness of the potential advantages from the space environment, and by the lack of data on the impact of the space environment upon ill or injured persons. If the medical community at large can be educated to begin thinking in terms of a microgravity hospital facility, then there will be an increased pool of ideas for space applications, in addition to informed opinions on the direction space medicine should take.

The third biggest market enabler in the field of space medicine is public will. The medical field is one of the most prestigious and giving fields. If it can be made known to the public that there are benefits to patients if only they can be treated in the space environment, then the public support could initiate much-needed funding for a space medical facility. (Many people are more likely to support such a humanitarian effort.)

Specific CSTS contacts in this market area included:

  1. Harborview Medical Center, Seattle, Washington.
    1. Tracy Varga - Physical Therapist/ Orthopedics.
    2. Merilyn Moore - Physical Therapist/ Burns.
  2. University of Washington Medical Center, Seattle, Washington.
    1. Dr. Greenlee - Orthopedics.
    2. Dr. Bassingthwaighte - Center for Bioengineering.
    3. Dr. Kushmeric - Professor Radiology, Physiology, and Biophysics.
  3. University of Southern California Medical School, Los Angeles, California.
    1. Ken Hayashida - USC Medical Student.
  4. Baylor College of Medicine, San Antonio, Texas.
    1. Dr. Michael DeBakey - Baylor College of Medicine.

3.7.3.6 Business Opportunities

The two primary barriers to assessing a business venture to provide medical treatments in space are the lack of information on the market and the assessed minimum cost per patient. Shipping an average patient to space to enhance survivability or shorten rehabilitation makes sense only if the cost falls within current thresholds for existing treatments. There is little likelihood that average medical insurers will fund extraordinary costly methods to save lives in the future. Hence, the cost of shipping the patient to space and providing care on orbit for a few days to a few weeks must cost between $20,000 to $100,000, depending on circumstances.

Unfortunately, analyses developed to assess the space business park (Sec. 3.7.6) show this to require launch costs of $100/lb or less, making space medical treatment beyond the capabilities of near-term launch systems. At transportation costs of $500 to 600/lb, the minimum cost for a 1-week stay would be at least $600,000. This makes such a business venture unreasonable at this price range.

However, there are possible exceptions. One is medical treatment for the very wealthy, who can afford to buy the very best care possible. This is possible, but not likely, because public funding is almost certainly required to develop the technology for low-gravity medical treatments.

3.7.3.7 Conclusions and Recommendations

Even without hard data on the response of seriously ill people in reduced gravity, it is apparent that one of the greatest areas that will be of use in space medicine is the application to burn patients and rehabilitation physical therapy. If surgery or long hospital stays can be avoided by sending patients to space, then it seems that those areas will be most beneficial to the patient and most cost effective. It is important to keep in mind, however, that most of the ideas are just hypotheses on the possible effects of space on the human body, due to the lack of a clinical database on ill and injured persons in space. This imposes a significant risk in any projections in this area. This area was defocused due to a lack of assessable market.

3.7.4 Space Hospitals

Vision statement: In the year 2010, 0g facilities exist in LEO for the treatment of heart disease, pulmonary diseases, and severe burn patients. Rotating outpatient facilities with reduced gravity are used for orthopedics, physical therapy, rehabilitation, and permanent care of handicapped persons who can afford the enhanced quality of life available with retirement in space.

3.7.4.1 Introduction/Problem Statement

Space hospitals providing long-term care using in-space facilities were identified in some of the initial brainstorming sessions as a potential market for a new low-cost, space transportation system. In conjunction with the space medical market area assessed previously, the potential for using long-term care on orbit to treat life-threatening or debilitating diseases, to reduce the suffering with chronic illnesses, or to improve the quality of life of the permanently disabled was examined.

3.7.4.2 Assessment Approach

As was done in the space medical market area, the medical field was divided into categories that might be future markets for in-space treatments, and then demographic studies were performed to estimate the U.S. market demand (in number of procedures and patients). In parallel with this effort, direct contact was made to specialists in these areas to obtain direct information on how such treatments could use the space environment. These direct contacts included some brainstorming sessions regarding the use of longer duration stays in the environment for medical treatments with experts in the field.

General statistics were gathered concerning illnesses and injuries that affect a large portion of the population, require long hospital stay times, expensive surgery, or expensive simulations of the 0g environment of space. Then those areas were further examined to predict the benefits and drawbacks to treating those patients in space. Some of the areas that are promising enough for further consideration are heart disease, pulmonary diseases, orthopedics, burn patients, physical therapy, rehabilitation, and quality of life (retirement in space). Each of these areas requires extensive research, which may also prove to be beneficial to patients on the ground. Pure medical research is the most promising area to apply to space especially in cancer research and HIV research.

The field of medicine is quite extensive with an overwhelming number of areas to consider. In order to obtain as broad a spectrum of medical applications for space as possible, it was necessary to be in contact with as many different specialties of medical personnel. Several excursions were made to hospital facilities and general statistics were obtained from major insurance companies and local hospitals. In this way, it was possible to estimate costs for running a medical facility in space and compare this to treating them on the ground.

There are several adverse affects on the human body from space flight, such as muscle atrophy and calcium loss, that can be counteracted to some extent by exercises and conditioning. Several opinions have been obtained about the benefits to patients who are treated in space, assuming that proper countermeasures for the adverse effects are applied. Some areas such as AIDS patients were not extensively considered because it was reasoned that those patients would not benefit from a space hospital any more than a ground-based one.

3.7.4.3 Market Description

Hospitalization tends to relate to higher hospital bills, so those illnesses or injuries that require hospitalization were examined more closely for the market for space hospitals. The costs can be broken down into several categories in order to highlight the most expensive procedures and patient care categories. From the 1990 Social Security Supplement, 4,170,000 recipients of Medicaid were general inpatients who received $13.378 billion in aid. This gives an average amount per person of $3,208. These values can be taken as an average amount of insurance that a typical patient receives for an inpatient stay. The yearly Federal budget for Medicare is $55 billion.

3.7.4.4 Market Evaluation and Assessment

In parallel with the market evaluation performed in section 3.7.3, Space Medical, the primary advantage of the space hospital is to produce an improved quality of life in a reduced gravity in-space facility.

  1. Retirement in Space - It has been postulated that the elderly could benefit by retiring to space in order to increase mobility, ability to care for oneself, and general quality of life.

    1. Market Size. Approximately 1 million Americans are admitted to nursing homes each year. Nursing home costs generally run $50 to $100/day for room, board, and services. About half of this money is paid by Medicaid.
    2. Symptoms and Treatment. Generally, the elderly find that they do not have the energy and strength to carry out everyday tasks for survival, so they have to retire to a home where adequate care (i.e., cooking, cleaning, maintenance, and transportation) is provided for them. Up to 50% of the people who are being taken care of in a retirement center also have neurological problems and are not able mentally to take care of themselves either. Elderly people tend to keep the friends they have had all their lives rather than make new ones at the retirement center. However, the staff has found that the more tenants get out of their rooms, for meals for example, and talk with people and ambulate, the better they do both physically and mentally.
    3. Personnel. A staff consisting of cooks, food servers, maintenance crew, cleaning personnel, and others would be required. Their numbers approximate 20% of the people in the retirement center.
    4. Space Applications. For long-term residences in space, the elderly may be some of the people who could benefit from living in reduced gravity conditions. Because of the bone calcium loss in a 0g environment, the reduced gravity environment may be healthier in terms of calcium loss for long-term stays. Without the heavy weight of gravity pulling down on them, elderly people may find themselves far more self-sufficient than they were on Earth. If they were only able to get around a little in their room and dress themselves while on the ground, they may find that they are able to get around enough to completely take care of cleaning, cooking, or other chores. In some cases, they may want to perform some type of job. It is possible that very little staff would be required to maintain a retirement center in space because the tenants could care for themselves.
      Additional benefits to living in space would be the novelty of it, the great view, and the experience of renewed health because of reduced gravity. Psychologically, it would be necessary to screen tenants in order to avoid those with neurological problems. Another disadvantage would be proximity to friends and relations. It would be hoped that at least one close friend or relative could make the transfer to space living also, or that communications would be adequate for satisfying the tenant's need for old friends on Earth.

  2. Physically Impaired - It has been postulated that the physically impaired elderly could benefit by retiring to space in order to increase mobility, ability to care for oneself, and general quality of life.

    1. Market Size. In 1990, approximately 14,164,000 U.S. citizens had work disabilities that either prevented them from working or limited the kind or amount of work they performed. This was about 8.9% of the total U.S. population. For permanent and total disability, Medicaid payments averaged about $6,600 per person, with almost another $12 billion spent from private insurance on disability payments.
    2. Symptoms and Treatment. The work disabilities can range from physical impairments such as loss of use of limbs or sensation to significant illnesses or mental impairments. In many cases, these can be treated through rehabilitation, and the person returned to gainful employment. In 1990, about 146,000 categorized as "seriously disabled" were rehabilitated into gainful employment. (For the seriously disabled, the wages earned from gainful employment are usually less than those of the able employed. This is particularly true for job-related accidents and work-related disabling events.) For many impairments, such as loss of use of a limb, the space environment may provide a better environment for work and other physical activities. This is particularly true if the impairment is related to the organs that provide support or locomotion on the Earth, such as muscular or limb disabilities.
    3. Personnel. Given a mix of physical impairments, the support personnel required for an in-space facility (cooks, food servers, maintenance crew, cleaning personnel, etc.) could be staffed from the physically impaired inhabitants. Furthermore, these personnel could provide the support personnel for entire space facility, such as the space business park described below.
    4. Space Applications. An in-space facility could provide improved quality of life and productive uses for physically disabled persons. These persons could also provide the staffing for other in-space facilities. In all the categories above, the main market drivers are cost and patient needs. The costs of transporting and sustaining a person in space must be compared to the cost to treat and sustain and maintain the same person on the ground, with sufficient additional benefits to justify the extra cost. That is, would insurance companies pay the extra money for clients to have better quality of life in space? There are no data on the impact of the space environment upon the elderly and the physically disabled. Therefore, the benefits for long-term patient care or hospitalization in space are hard to predict. It is hoped, however, that this study will be able to generate interest in research in these areas for aerospace medicine research.

The market assessment for these market areas is primarily driven by the needs for supporting long-term working and living in space. Elderly people who need to be taken care of in a retirement center tend to be depressed and bored. If a space retirement center could offer mobility in a reduced gravity environment and entertainment (views in space, work to do, being independent), then it is possible that some people would want to spend the money to retire in space. However, at approximately $10,000 per day to stay in space, it is unlikely that the market of those who could afford to retire in space would be large. (Half the people in nursing homes rely on Medicaid to pay half the present cost.) And the number of severely physically disabled who could afford this (or whose insurance could afford this) would also be small.

No market was assessed from this area due to the lack of real market demand quantified for any probability demand market through the 2010 to 2020 time period.

3.7.4.5 Prospective Users

As with the space medical market area, the biggest market barrier is research. There has been little research done on the impacts of the space environment on the elderly or physically impaired. If research can be done it will more clearly show patient benefits or drawbacks, and it will illuminate potential markets that right now are invisible because of lack of knowledge. Specific CSTS contacts in this market area included:

  1. Harborview Medical Center, Seattle, Washington.
    1. Tracy Varga - Physical Therapist/ Orthopedics.
    2. Merilyn Moore - Physical Therapist/ Burns.
  2. University of Washington Medical Center, Seattle, Washington.
    1. Dr. Greenlee - Orthopedics.
    2. Dr. Bassingthwaighte - Center for Bioengineering.
    3. Dr. Kushmeric - Professor Radiology, Physiology, and Biophysics.
  3. University of Southern California Medical School, Los Angeles, California.
    1. Ken Hayashida - USC Medical Student.
  4. Baylor College of Medicine, San Antonio, Texas.
    1. Dr. Michael DeBakey - Baylor College of Medicine.

3.7.4.6 Needed CSTS Attributes

There was not a sufficient level of demand to establish unique CSTS requirements and attributes for space transportation, other than the general requirements of personnel travel and low cost.

3.7.4.7 Business Opportunities

As with the space medical market area, there was no business opportunity identified for this market area. However, there is a possible exception: the market of the very wealthy, who can afford to buy the best living conditions possible. However, this market is smaller than the non-physically impaired tourist market, which was assessed at a few hundred persons per year for a transportation cost of $500 to 600/lb (see the space business park, Sec. 3.7.6).

3.7.4.8 Conclusions and Recommendations

No market demand was assessed for this market area. Further research is needed to establish a better database upon the influence of the space environment upon the elderly and physically impaired.

3.7.5 Space Settlements

Vision statement: In the year 2015, hundreds of people reside in low-gravity settlements and permanent care facilities in LEO (and possibly in higher orbits). Many of these people are retired, but many work at space transportation nodes connected with the settlements, many work to provide services for the settlements, and some telecommute to the ground, preferring the quality of life on orbit to a lesser existence on terra firma. Quite a few of the inhabitants are physically disabled to the point where they would require constant care on Earth, but are fully mobile and able to care for themselves in the low-gravity portions of the space settlement. These settlements operate with biological environmental control systems that are almost closed, and require a minimum amount of resupply from Earth.

3.7.5.1 Introduction/Statement of Problem

Long-term manned settlements in space, even near Earth space, require tremendous upfront investment costs and a mostly closed environment to avoid heavy resupply costs. What fraction of the populace has enough capital and enough determination to put up with the danger, the lack of privacy, and the deprivations sure to be required in the initial space settlements? What work can be done at these settlements to pay the overhead costs and provide for expansion or improvement of the facilities? Is it more cost effective to build the first settlements using terrestrial or extraterrestrial materials? Are there enough space enthusiasts in the world with enough money to pay for the first settlement?

Figure 3.7.5-1. Rotating Space Habitat Concept

3.7.5.2 Study Approach

Our approach is rather straightforward. Using estimates of $8 billion to $15 billion to develop even minimal infrastructure to provide useful materials from lunar regolith and knowing this is to be a commercial development, we have chosen to defer analysis of the space colony approach espoused by Gerald K. O'Neill et al. and designed a rotating long-term habitat using hundreds of space station modules (
Fig. 3.7.5-1). Assuming no development costs and somewhat optimistic production costs, a module holding four persons would cost about $30 million including delivery and on-orbit assembly costs (@ $400/lb). Paying off this cost with a 30-year mortgage amounts to about $50,000 per month per person (@ 6.5% interest). There are people who could afford this expense but they probably would not put up with the crowding. Cheaper launches would certainly help, but even free launch and assembly only drops the cost to $15,000 per month.

3.7.5.3 Market Description

There appears to be no near-term commercial market in space settlements. The nonrecurring costs drive the price of a "space apartment" beyond what all except the extremely wealthy can pay.

The hidden assumption in many of the past space settlement concepts proposed in the literature are that there are also large-scale space activities under way either in space-manufactured products or in the in-space production of solar power satellites. The CSTS assessment is that many of the underlying assumptions for these large markets have changed since the 1970s and that the rapid and highly profitable growth of these markets cannot be depended upon to driven space transportation demand in the next two decades. Without this high level of other in-space activities, the economic infrastructure, that can justify these large-scale investments in large habitations is not present.

3.7.5.4 Prospective Users

As the assessed market demand for this area was not present, no prospective users were identified.

3.7.5.5 CSTS Needs and Attributes

The primary CSTS needs and attributes for these markets are driven by the general requirements of low cost and mixed payloads of people and cargo into orbit. Because a specific market was not identified from this assessment, specific needs and attributes were not generated.

3.7.5.6 Business Opportunities

No specific CSTS business opportunities were identified in this market area without other market areas providing large-scale economic activities in space.

3.7.5.7 Conclusions and Recommendations

This market area was defocused because of a lack of an assessed market demand.

3.7.6 Multiuse LEO Business Park

Vision statement: In the year 2005, researchers regularly visit small commercial laboratory modules in LEO to activate and monitor various biological and materials processing experiments. These laboratories usually operate man-tended, but occasionally a researcher camps out on-orbit to provide hands-on attention to an especially important experiment. Some of these experiments show the way to constructing better materials and more efficient electronic devices, but a majority deal with developing new drugs and processes to heal diseases and rebuild bodies shattered by war or misfortune. Most of the breakthroughs discovered here will be used in production factories on the ground, but some will require either the 0g or the cheap hard vacuum of LEO to ensure commercial success.

In the year 2010,combined-use, 0g commercial business parks flourish in LEO. These facilities provide volume and utilities for biological research and production, plus a destination for the first space tourists. Each facility is visited once a week to exchange crew members, products and process materials, and tourists staying in the plushly appointed visitors modules. The laboratory modules are doing a booming business growing cloned human organs for transplants and the total tourist traffic is 500 to 1,000 persons/year per facility. Laboratory space is renting for about $1.2 million per double rack per year, a round-trip ride to the station is about $200,000, and a week in the visitors wing is another $50,000.

In the year 2020, the first "orbitel" (orbital hotel) is operational. The "place in space" to visit. This large pressurized structure has a window-covered open area over 200 ft across for 0g recreation and network-sponsored sporting events. It also has two counterspinning sections, which simulate one-sixth gravity,. to provide comfortable long-term living quarters and the first conventional toilets and showers in space. Surrounding the central hotel/recreaction facility are myriad offices, light industrial complexes, and apartments. It functions as a destination resort, research park, and international banking center. This complex supports over 5,000 people with 3,000 long-term residents and 2,000 transient tourists. Constant access and resupply is provided by two round-trip flights per day.

3.7.6.1 Introduction/Statement of Problem

Currently, the vast majority of operations performed in space are done by machines. There will not be significant human involvement in commercial space operations, either as workers or as visitors, until some form of long-term, habitable, orbital facility is established. The international space station is a crucial first step in this direction, but it is a scientific research station run by government agencies and not designed to service commercial operations. Numerous business opportunities have been identified that have the potential for using an in-space facility as part of their routine business operations. Among these are some aspects of space manufacturing, space tourism, and industrial research. Our business and market analyses indicate there is tremendous profit potential for industries that get the jump on their competition by using microgravity to improve their production processes or shorten their development cycle. Who are the potential users? What are their business needs? What sort of facilities are best suited to commercial operations? When should they come on line and what features and attributes are necessary for profitable operations? These issues and others are addressed in the sections following.

3.7.6.2 Study Approach

There are two aspects to any new commercial business: technology push and user pull. We have assumed the international space station development provides adequate technology push for a commercial facility in low Earth orbit (LEO), establishing the costs and operational characteristics of a commercially oriented in-space facility assuming space station technology and systems to reduce technical risk in future ventures. We also assessed the market demand (the "pull") from potential users and financiers to determine the timing, design, and operational characteristics desired by potential users.

We have tried to represent two communities during this process. The first is the facility developer, the entrepreneur who raises the venture capital, hires the facility manufacturer, arranges for the launch, and puts the privately owned research facility on orbit. The second is as the end user; that is, as the pharmaceutical company, the bioresearch company, the microchip producer, or the tour operator who pays for the goods and services offered at such a facility. We will discuss the issues related to developing the facility first, and then cover the issues with respect to end users. Real Estate Development in Low Earth Orbit (LEO). The best analogy to this type of development is the extension of traditional real estate development practices into space. In this type of business ventures, a new real estate development is planned, financed, constructed, and either sold or operated in exchange for returns to a body of investors.

The scale, scope, and complexity of large real estate development projects are analogous to what is required for space infrastructure development, with the one notable difference being that real estate projects are more often actually realized. Terrestrial business park developments manage budgets of up to billions of dollars contributed by many investors and lenders, over periods as long as decades, and coordinate the activities of hundreds of diverse suppliers to generate wealth and, along the way, physical infrastructure.

It is important to note that these ventures are highly market driven, and that the goals of successful investment by meeting user needs are in contrast to the usual aerospace approach of designing and building a system and then looking for commercial applications for it. Traditional aerospace goals, such as high performance and technology innovation, would be secondary to generating profit, because without significant assuredness of profit, potential investors would simply look elsewhere and such goals would forever remain moot measures of unrealized projects.

The approach of using a commercial "business park" is used instead of an international space station because the vast majority of commercial users want to deal with a service oriented private entity instead of a government bureaucracy. Contacts with potential users and developers specifically indicated this factor as part of their decision process. Government service providers have no need to meet demanding schedules, since they have no competition. In addition they are subject to the whims of congressional politics and users have little legal recourse when the services are arbitrarily changed or dropped completely. A commercial investor with significant monies at risk cannot accept this uncertainty. The key role of the government in the development of future space industrial facilities is to develop and demonstrate the technologies and operations needed for future commercial space operations through the international space station.

This analysis first compares the maturation of the real estate and aerospace industries, highlighting key differences. Terrestrial mixed-use business parks (the most applicable model for potential large-scale, space-based profit-making enterprises) are examined as a model for future space business park development, by analogy to the way they are developed on Earth. Next, this business model is applied to the development of research, production, and leisure facilities in LEO. The infrastructure services to be made available to industries in space are listed and discussed, and the enabling financial arrangements are specified. Finally the organizational requirements for developing such mixed-use LEO business parks are listed.

3.7.6.3 Market Description

The real estate industry, like the aerospace industry, is a child of World War II, but for different reasons. The rapid growth of the automobile industry after the war and the concurrent development of the interstate highway system (called a defense project at the time), together with consumer pressures of the Baby Boom generation, led to the largely unplanned result of suburban growth, shopping centers, and tract housing development. Since there was little or no active government involvement in this process, and no major firms dominating the industry nationally, the way was clear for thousands of small entrepreneurial builders and developers to sense the market demand in specific locales and bring projects to market. While not all projects and developers were successful during the building of suburbia, most people who entered the field during the 50s and 60s were able to make a good living, and consolidation of the industry into a few national players did not occur.

The economies of scale needed to control costs are generated at the component supplier level in the real estate development industry. Manufacturers of HVAC (heating, ventilation, air conditioning) systems, electrical equipment, lumber, structural steel, elevators, windows, and the like have developed lines of standardized building components useful in a wide variety of buildings and locations. Creativity in the real estate development industry is in how the standardized parts are integrated into unique (or not so unique) designs intended to meet specific market demands and price targets. Similarly, local and state building codes evolved to allow use of these standard components, without costly requirements for zoning and code variances and reviews.

In today's market, a significant difference between the aerospace and real estate industries is the highly fragmented business organization within the practice of real estate development when compared to aerospace. The aerospace industry is characterized by a few principal manufacturers (approximately a half dozen), and a limited number of principal players (about a dozen customers comprise over 80% of the total market). In contrast, the real estate industry has dozens of large players, hundreds of midsize players, and thousands of small players involved as principals in real estate deals. These firms in turn rely on thousands of small design, engineering, brokerage, and financial services firms, which all contribute to making deals happen.

A second principal difference between the two industries is in the fundamental premise in how the business operates. Members of the aerospace industry, and in fact most manufacturing companies, operate with a more or less consistent level of business activity. The airlines will always need a certain percentage of the fleet replaced in any given year, more so when markets are growing or increased fuel or operational efficiency can enhance operating margins. The aircraft and engine manufacturers can count on some level of continued new orders and service work on the existing fleet even during lean economic times, and the entire industry benefits from reducing costs and servicing an expanding market.

In contrast, the real estate development business operates in a different manner, because projects start and stop due to events beyond control of the developers. Figure 3.7.6.3-1 illustrates the risk factors affecting the success or failure of any particular real estate deal. Any single risk factor within the diagram has the capability of effectively killing a development, regardless of whether it is small or large, and regardless of whether the dozens of other factors are all favorable. For example, an office tower may have significant preleasing, cost and design advantages, financing commitments, and a top-level development and management team, but if the neighbors protest the proposed zoning and prevail in a referendum, the project will not happen. Political, environmental, and financial factors affecting a particular project are largely indifferent to whether the project happens or not, and the benefit of the doubt seldom falls in favor of a project proceeding.



Figure 3.7.6.3-1. Economic Feasibility and Real Estate Success (Peter T. Allen © 1992)

Last, the corporate cultures of the two industries are widely disparate. In aerospace, both the manufacturers and their customers are large corporations or government agencies with tens to hundreds of thousands of employees sharing a consensus to continue to do business. In this work envi-ronment, individual performance is typically measured in terms of teamwork and efficiency of function within the system. Aerospace firms are very focused upon controlling risk, either in technical, market or political arenas, and they are driven by their need to sustain and maintain their highly important large-value product lines. In contrast, in real estate development all sites and projects are to some extent unique and are the responsibility of a relatively small number of people. Individual personality characteristics such as drive, imagination, salesmanship, and financial sense are much more important in being successful due to the inherent difficulties of making any project happen. Rational risk-taking is encouraged, in part driven by the awareness that new ventures must be constantly developed, nurtured, and executed as part of a portfolio of business activities.

Given the many differences between the two industries, an analysis of the comparative cost effi-ciencies between manufacturing and real estate reveals some surprising relationships. Figure 3.7.6.3-2 graphs the cost per pound and cost per cubic foot of product for airliners, heavy construction equipment, and cars and trucks as representative manufactured products against single-family homes, office buildings, cruise ships, and oil platforms as representative real estate projects.


Manufacturing Versus Real Estate

Figure 3.7.6.3-2. Comparing Cost Efficiencies

It is interesting to note that real estate products remain relatively flat in cost/lb and cost/cu ft over projects ranging upwards in size by four orders of magnitude. In contrast, manufac-tured products vary widely from industry to industry, with aerospace products two orders of magnitude more expensive than any of the other products. Part of this difference may be driven by the ability in real estate products to use common, mass-produced elements as the basic building blocks for larger elements.

Terrestrial Mixed-Use Business Parks. The best analogy to the space business park concept developed in this study is the terrestrial mixed-use business park. Terrestrial mixed-use real estate development projects are among the most difficult of all types of projects to develop due to the large scale of the investment and the political, design, and market positioning complexities of the various uses. Mixed-use projects are typically done on the largest available parcels in a given market in order to minimize absorption (selling) time and to spread the cost of common infrastructure over as wide a revenue base as possible. In addition, political considera-tions will often dictate some degree of mixed use development where a single use such as office or industrial may be the preference of the developer.

Business parks can range in size from 100 acres to 10,000 acres. The largest developments, such as the Irvine Ranch (California) and Columbia (Maryland) are more closely related to British New Town projects than to traditional U.S. developments. Total investment in land, infrastructure, buildings, and ameni-ties can range from $50 million to over $2 billion, depending on size and location. The period of active development and construction can range from 5 years to 20 years, with ownership and management of rental properties within a development continuing for another 10 to 20 years after completion of construction. Ultimately, rental properties are sold, syndicated, or refinanced to return the original equity investment and generate "back-end" profits.

Business park uses typically include land for sale for owner-occupied office research, and light manufacturing buildings; single-tenant and multitenant rental buildings for the same uses; a hotel or some type of transient or short-stay housing; varying degrees of commercial and retail space; and recreational amenities. Larger projects will also generally include single-family and multifamily residential neighborhoods, with both rental and ownership units, child care facilities, and, in the largest projects, schools and medical facilities.

When a developer is planning out and doing the financial analysis on such projects, there is little or no idea of who the actual users will be or what the specific building projects will look like. However, the requirements for the core infrastructure do not require specific users, only general market targets. Road systems; sewer, water, and utility service; site amenities; preservation of significant natural features; political realities of maximum allowable density; municipal impact fees; upgrading of sewer and water treatment plants when needed; local tax incentives for new business attraction; and similar issues are all considered when large scale mixed-use projects are designed and developed.

Once the overall project design and market mix are established, one of the key factors in financial success lies in the phasing plan for the infrastructure development. Ideally, the initial presales will cover the costs of the first phase of the infrastructure development, and the amount of nega-tive cash flow required to bring the project to market will be minimized. Subsequent phases of development are financed through "recycling" of the same investment used to open the project, so the amount of additional cash required to finish the project is kept to a minimum. The true profit from the development activities does not actually begin to show until the project is typically 80% or more complete, although fee and management income to the developer is usually available throughout the life of a project.

In Section 3.7.6.3.3, a direct comparison of the space business park to a typical terrestrial mixed-use real estate development will be made.

3.7.6.3.1 Market Evaluation

The market for a mixed-use space business park must address the different requirements for a mix of commercial users. Commercial users can capitalize on the space-based environment when it is available on a regular and controlled basis. They will pay for and profit from ready access to vacuum, variable gravity levels ranging from micro to hyper, extreme temperature ranges, direct sunlight, and clear views of Earth and space. In addition, isolation and extraterritoriality are available in orbit. Considerable research (and followon commercial exploitation) will focus on the effects of gravity variation. The control of gravity will open new windows into biology, chemistry, materials science, and op-erational capabilities. In addition to microgravity effects, it will be possible to vary the levels of gravity, providing insight and knowledge previously unobtainable. The space business park must provide a means to address these various customer needs.

Figure 3.7.6.3-3 details how the inherent characteristics of LEO space (several of which are typically regarded as operational problems) may in fact be marketed to business-park tenants as resources. Figure 3.7.6.3-4 expands this picture, by indicating which of these "controlled environment" and other services are required by, desirable to, or incompatible with various classes of potential users. Arranging and managing the provision of this array of services is the development and operation of the business park.

On-orbit facilities would offer a core of common, basic services to all customers. These services would include many typical at terrestrial business parks, such as power, delivered utilities, waste removal, structures, and administrative/financial services, telecommunications, computing, security, and maintenance. An important aspect of security includes maintaining the confidentiality of proprietary intellectual property. Available operational services unique to the space environment include station keeping, thermal rejection management, radiation shielding, debris armor, and, as necessary, pressurized volume, automa-tion and robotics, and EVA support. These basic services could be offered by business park management directly or made available by franchise or outside service contracting.



Figure 3.7.6.3-3. LEO Business Park Resources

The business park would provide services for supporting on-orbit staffs and visitors, including lodging, food services, medical clinic and recreational opportunities. Businesses, universities, and governmental agencies could send their own researchers or purchase the services of bonded research staff stationed on orbit by the business park or third party providers.

An early and highly elastic market segment is tourism. Terrestrial mixed-use business parks commonly include hotel facilities to service the businesses in the business park or to cater to tourists into the region. For the initial market, the space business park should include facilities for short-term stays of researchers working at the business park.

Beyond the business travelers, market assessments indicate a percentage of the terrestrial tourism market will be eager to experience the absence of gravity, the extraordinary views offered of Earth and space, the frequent and unique sunsets and sunrises, and other recreational opportunities. (See Sec. 3.5.6 for a further discussion of this market.) The earliest mixed-use business parks could offer tourist accommodations modeled on bed and breakfast operations, or on the pay-to-help EarthWatch lay-research assistant scheme footnote#6. As space operations increase and transportation costs decrease, facilities dedicated to tourism can evolve to offer resort-class hotels, with name entertainment, traditional resort recreation, and novel forms of culture.



Figure 3.7.6.3-4. LEO Space Business Park Service Requirements

The prime decision in any real estate project is selecting the location. Users of a space business park will have different preferred orbits and launch sites to maximize their return. Minimizing launch costs to maximize return will prefer orbits selected to maximize the payload lift to orbit. Manufacturing users, especially those processing large amounts of material, will prefer orbits to minimize their recurring costs for transportation. Tourists will likely choose traveling to orbits with a higher inclination (or polar orbit) over a lower inclination orbit, so that they can observe more of the Earth's surface, given a specific ticket price. Many Earth observation users will find Sun-synchronous orbits better suited or required to accomplish their missions. Microgravity research users may not care what inclination is used.

Based upon discussions with potential users, a 51.6 degree inclination was selected for the space business park. This inclination was to maximize the Earth viewing opportunities for the space business park, and to place it into the vicinity of the international space station, which will maximize the possibility of access. This assumption may be revisited in later analyses if it is determined the payload capability to the system should be maximized, which would push for a lower inclination orbit.

3.7.6.3.2 Market Assessment of LEO Business Park

A major driver in the cost of a space business park is the initial cost. For a terrestrial mixed-use business park, this is the cost of the raw (unimproved) land for the business park. The LEO equivalent of raw land cost is the launch cost per pound to a given altitude and inclina-tion. Since large projects require large tracts of land, it makes sense to buy in bulk using long-term contracts rather than buying an acre of land at a time. The raw land for virtually all large scale real estate projects is acquired in this manner. For orbital systems, however, the cost of land is free, but the initial cost is the cost for launching the system into orbit. (The nearest terrestrial analogy is a trucking contract for fill dirt, needed on some sites before initial construction and grading can begin.)

The initial launch cost for a LEO space business park is determined by the mass required, and the price at which these launches are tendered. (Continuing the analogy to terrestrial development, a purchasing agent buying a million pound trucking contract would be indifferent to whether the trucks were Peterbilt or Kenworth, or whether the loads came in 20-ton or 50-ton increments, as long as the total cost is as low as pos-sible and delivery is as fast as possible. Similarly, the commercial developer of a space industrial park buying a million-pound launch contract would be indifferent to the make of the launch system, assuming the system could deliver his systems at as low a price as possible, and with delivery as fast as possible.)

High confidence must be provided in the financial returns for the project before significant project financing can be obtained. The current catch-phrase used to describe the real estate industry is "market driven.” Practically speaking, this means that a project must be largely preleased or presold before significant debt and/or equity financing can be procured. Users of space (either rental or sale) are courted and in-duced to sign "soft" letters or letters of intent that are then used to finalize designs and procure political and financial approvals. For larger users of office or research space, the process of eval-uating locations and size requirements can take several years before any binding agreements are executed, with implementations taking several more years.

Assuming that LEO projects will be as (or more) difficult to finance as other large-scale real estate projects, the preselling process is that much more important to the project's business viability. Referring back to Figure 3.7.6.3-3, a matrix of possible LEO business park users and the menu of possible services to support these users is illustrated. Every node in this matrix represents a discrete selling opportunity. As many of these nodes as possible would need letters of intent or contingent lease/purchase contracts in order for initial equity investors to become convinced of the viability of the market. Establishing this level of initial user interest, through the letters of intent, will be a critical step in establishing the ability to obtain financing for the space business park.

For example, hotels and tourism need established chains to provide name recognition, experi-enced operating staff, and market credibility. A selling strategy for this node would be to play off Hilton's pledge to be the first hotel in space against other large players such as Hyatt, Radisson, Resorts International, and Sheraton. The goal would be to execute a contingent management contract with the operating chain and in-clude its input in the design and development process, hopefully with some seed money con-tributions on top. In addition, 2 to 3-week package tour itineraries need to be developed, including ground time in the tour plan and all transportation costs. This package could then be marketed through exotic and high-end travel agencies, with refundable reservations going into a growth mutual fund and converted to down payments on excursion packages when delivery dates become finalized.

The applied research and light manufacturing nodes would be sold exactly as Earth-based real estate is practiced. Growing companies in targeted industries are identified and contacted to "make them aware of the tremendous opportunities" of the project. The goal would be to get the prospects' creative minds working on what could be done with a given volume of space with ap-propriate utility connections and gravity levels, and how much money could be made from the endeavor. It should be noted that the space business park operating model, with routine scheduled service, a commercial service-oriented outlook, and the possibility of longer duration research operations on orbit at relatively low cost, meets almost all of the customer needs identified in the space manufacturing section of this final report, Section 3.2.2.

Based upon inputs from the commercial real estate developers contacted in this market study, management of the financing requirements for multibillion dollar projects in LEO would be very similar to that for terrestrial projects of similar size. Large projects are first broken down into smaller units of $10 to $100 million each, where possible. Divisions are made by the smallest unit that can have a discrete legal description and separable mortgage. The largest projects within the mixed use development (brainstormed as such entities as casinos and resorts) where separated mortgages are impractical, are syndicated among multiple lenders with the loan consortium holding an undivided security interest in the property.

The financial model used for venture viability in virtually all real estate projects is the discounted cash flow model. Costs and income are placed in the analysis at their actual projected values factoring in inflation. Rents and expenses are typically assumed to rise at or slightly below the CPI inflation rate, producing a constant value revenue stream. Depreciation expenses, marginal tax rates, capital gains, and loan amortization are all calculated in the analysis, with the time value of the money being factored in at the end of the analysis. This discounting of the value of the money earned in future years results in a total yield calculation called an internal rate of return (IRR). The CSTS estimate of 20% IRR after 10 years of operations was felt by the commercial real estate developers contacted in this survey to be marginally acceptable, although the preferred yield should be in the range of 25% to 30% in order to attract the initial investors with such a new type of development. If this was more of a routine (less risky) venture, IRR yields of less than 20% could be considered.

The commercial developers contacted pointed out that one of the best ways of boosting IRRs is to compress the time from when the equity money is spent to when the cash flow from sales and rentals begins. As shown in Figure 3.7.6.3-5, the discounting curves show a significant reduction after 5 years of project duration, so a 10-year schedule for construction and launch would need about twice the undiscounted return of a 5-year schedule in order to maintain the same IRR. This will place a premium upon the rapid development, manufacture, and launch of a space business park over the more leisurely development pace of governmental programs.


Discounting curves

Figure 3.7.6.3-5. Net Present Values

LEO Business Park Concept

The LEO space business park concept evaluated in the CSTS was built in conjunction with several commercial real estate developers, architects, and entrepreneurs experienced in commercial space activities. To reduce cost and technical risk, the systems assumed are based upon space station technology and subsystems, which also allows reasonable confidence in the cost and development numbers.

An initial man-tended system, growing to a larger full-time commercially oriented system was developed; cost and revenues estimates were developed; and space transportation system needs were determined. Figures 3.7.6.3-6a and -6b show the overall configuration concept for the initial- and medium-term space business park.



Figure 3.7.6.3-6a. Man-Tended LEO Microgravity Research Station


Figure 3.7.6.3-6b. Baseline Space Business Park Configuration

The LEO business park starts as a materials processing and biological test center and eventually grows to satisfy many other users. For the purpose of this analysis we have costed a medium-term business park, where the facility is initially developed to be a materials processing and research facility. As with a terrestrial development, a second phase of the development is financed through recyling the initial financing after initial cash flows have been established. After 3 years of operations, a small habitation module is added to handle well-to-do tourists (the bed and breakfast module). This additional revenue helps the business park to meet the target return rate of 20% after 10 years from first operations.

Revenues for the initial phase of the space business park as a commercially oriented research facility are based upon selling "lockers." As described more fully in the space manufacturing section of this final report (Sec. 3.2.2), typical space research experiments are contained in lockers (based upon the standard payload accommodation on the space shuttle and Spacehab), which may be aggregated into "standard double racks," each containing 12 lockers. The CSTS projected demand sensitivity for the equivalent number of science lockers sold each year as a function of launch cost per locker is shown in Figures 3.7.7.3-7 and -8. These numbers assume the 90% probability market capture case is for research flights only (i.e., no product ever goes to production), and that, as the cost per locker drops, space processing captures an increasing portion of the pertinent research monies up to 20% of the $1 billion currently available. The 50% case assumes one or two products go to production and CSTS can capture up to 50% of the pertinent research funds, and the 10% probability case assumes that several prospective products are "hits" and that space manufacturing becomes a major growth market capturing a significant fraction of the microprocessor and medical products markets. The logic behind these estimates found in Appendix F.1.1.



Figure 3.7.6.3-7. Science Locker Traffic Versus Launch Cost


Figure 3.7.6.3-8. Science Locker Traffic Versus Launch Cost

The price elasticity of demand for space tourist traffic for a 1 or 2-week space vacation in LEO is shown in
Figure 3.5.6.6-1. These data represent a composite of economic analyses and survey data from various references1–7. It should be noted that the tourism market, as part of the space business park, is adjusted to ensure it is a profit center, and ticket prices are adjusted upwards to ensure that the space tourism business operations are not subsidized by the research and manufacturing operations. At the prices assessed for this condition, the tourism market just "skims the cream" from the available demand market. Tourist tickets are priced to pay off the added DDT&E and modules in 8-1/2 years (as are hotels and cruise ships).

These combined markets of research locker traffic and tourism traffic allow the sizing of the space business park as a function of cost per pound to orbit. These results are shown in Figures 3.7.6.3-9 and -10, below, for the medium and low probability research locker and tourist traffic. The cost numbers assume a 25% surcharge on each locker for each additional week on orbit. The price per locker and price per ticket (and the corresponding numbers of lockers and tourists) have been adjusted to meet 20% IRR after 10 years of operation. The high- probability, low-traffic model could not provide a 20% IRR until launch cost fell below $50/lb, so it is not shown.

The CSTS analysis also indicated that LEO space transportation costs had to be less than about $560/lb to achieve the required 20% IRR after 10 years of operations. At costs over this value, the system could not capture a sufficient level of demand to meet this target level of returns.

An important design requirement for the CSTS is system payload capability, so the sensitivity to flight rate and logistic module sizing is included in the figures. Hypothetical payload masses of 10,000, 30,000, 55,000, and 100,000 lb to a nominal space business park orbit are shown on the figures.


Figure 3.7.6.3-9. Launch Traffic to the LEO Business Park Versus $/lb


Figure 3.7.6.3-10. Payload Size Sensitivity to Launch Price and Rate

Sensitivity of Results Space business park economics will be driven by the space manufacturing traffic, as shown in Figure 3.7.6.3-10 below for the medium-probability market. The overall business park IRR is not very sensitive to tourist ticket price and tends to optimize at around $600,000 per trip. At these prices, there only about 150 tourists/year, but this traffic provides enough profit to pay for one additional tourist module and adds a small margin to the 15-year IRR. The logistics module required to meet this level of traffic is identical to that currently planned for the international space station (see Fig. 3.7.6.3-11), except that it is launched every week instead of four times a year.


Figure 3.7.6.3-11. Sensitivity of Business Park IRR to Tourist Ticket Price (Medium Probability)


Figure 3.7.6.3-12. Mini-pressurized Logistics Module Sized for Early Space Business Park

Figures 3.7.6.3-13 and -14 indicate the sensitivity of the returns to transportation cost and to development cost.


Figure 3.7.6.3-13. Space Business Park IRR Sensitivity to LEO Transportation Cost


Figure 3.7.6.3-14. Space Business Park Sensitivity to Business Park Development Costs

Financing Issues An issue raised in the market survey effort was whether this project's financing was achievable from typical real estate development sources. Historically, pension funds and insurance companies have been the long-term lenders for income producing property. Due to the financing excess of the 1980s and the continuing drag on commercial real estate markets by Resolution Trust Corporation inventories, long-term lending by these institutions has been significantly reduced. However, pension funds with vested interests in par-ticular locations or industries (construction and municipal unions) often make loans when other financing is impossible to obtain. By analogy, aerospace unions would have a vested interest in seeing large-scale LEO construction happen, so their pension funds might be possible lenders for such a pro-ject. Preselling would give the loan underwriters for the pension funds the necessary degree of comfort to make load commitments, subject to verification of construction cost, launch cost, and operating cost.

Real estate investment trusts (REIT) have become much more active in the last few years as traditional lending has become less available. These publicly traded stocks acquire and hold real estate assets and are sold on the yields generated from rental income after all expenses. Cur-rently, REIT offer yields of from 7% to 12%, plus whatever returns are generated from the ap-preciated value of the stock. Future profits from sale or refinancing of individual real estate assets are considered as part of the overall investment decision but are not as heavily weighted as current yield. While REITs were not considered by professionals in the real estate development field as suitable sources for initial financing, once an operating history in LEO is established, REIT could be excellent long-term financing sources for continuing LEO development. This is particularly true if initial returns are high enough and stabilized returns hold at or above casino/resort returns (13% to 16%).

3.7.6.3.3 Comparison of Space Business Park to Terrestrial Mixed-Use Development

In section 3.7.6.3.3, a direct comparison of the space business park to a typical terrestrial mixed-use real estate development will be made. (This section, however, is missing from the published document or was never produced, consequently it cannot be included here.)

3.7.6.3.4 Market Infrastructure

Organizational Requirements for Implementing LEO Real Estate Operations. In contrast to the well known terrestrial real estate development market, operations and organization for a space business park will encounter new organizational and operational issues. Operating expenses for LEO rental space, whether used for research, light manufacturing, or tourism, need to be closely analyzed and defined. Government-funded space stations provide a crucial step in quantifying these costs and providing the operating experience needed for larger facilities, without which the projected profit margins from LEO commercial facilities would not be believed by investment underwriters. Staffing requirements, replenishment of consumables, recycling/on-orbit food production, and long-term launch costs all need to be defined with a rela-tively high degree of confidence. The current international space station project provides crucial data and experience necessary to allow the successful implementation of a commercial space business park.

The unknown status of tax laws was identified as a potential roadblock to the space business park. One of the largest operating expenses in terrestrial real estate is property taxes. Multibillion dol-lar development at LEO will be impossible to finance until a clear determination is made as to the jurisdiction and tax status of the investment. While initial steps towards clarifying this issue have been made through legislative actions and tax code clarification, substantial uncertainties remain.

One of the standard clauses in all U.S. real estate contracts is a statement saying, "This contract shall be governed by the laws of the State of ______." This clause needs to be clarified for a space business park development. It should be noted this state-ment has both positive and negative implications for business considerations, such as the tax status of income earned in orbit, banking and securities regulations, gambling and vice laws, building code requirements, and security positions for the mortgage lenders who will be financ-ing the infrastructure development. Some of these implications (such as a potential favorable tax treatment for commerce transacted in space versus commerce transacted on the Earth) may be positive.

An equivalent of a county register of deeds will be needed in order to provide a mecha-nism for recording mortgages and Uniform Commercial Code (UCC) filings for personal prop-erty financing. This is important to reduce the risk of mortgage positions through insurance of financial positions. Any title insurance com-pany requested to insure a lender's mortgage position would need all of these jurisdictional is-sues resolved before it would be in a position to insure a mortgage loan.

The complexity of the tasks and the political and financial uncertainty inherent in large scale or-bital construction are comparable in scope to the largest terrestrial real estate projects, such as Disney World or Research Triangle Park in North Carolina, so the organizational models used for such projects would seem to be an appropriate model for LEO development. All real estate projects, regardless of size, have at their core an entrepreneurial team of fewer than a dozen key design, marketing, construction, and finance people who coordinate the develop-ment process through all of the risk factors shown in Figure 3.7.6.3-1. For LEO mixed-use business park de-velopments to become a reality, these teams need to be assembled and a minimum level of seed money needs to be spent to bring in the various users. Soft commitments from the user groups are essential to design and develop facilities that will be well received in the marketplace and provide the returns on investment necessary to validate the concept of long-term com-mercial activities in space.

3.7.6.4 Prospective Users

The targeted market for the space business park concept developed above is the research and tourism markets. For the in-space research activities, our market analysis has indicated that key prospective users would be microprocessor producers, medical tissue suppliers, and industrial producers seeking to improve their fundamental production processes. For the tourism market, the prospective users are identified from the market demographics as suitable persons in an acceptable age and income bracket. See section 3.5.6 of this report for more data on the space tourism market.

3.7.6.5 CSTS Needs and Attributes

3.7.6.5.1 Transportation System Characteristics

Key characteristics needed for the space transportation system to support the space business park are driven by the customer needs from the research and manufacturing market area, and the space tourism market. These characteristics are summarized in
Figure 3.7.6.5-1, below.

CharacteristicRationale
Mixed people and cargo payloadsCombination of persons (tourists and researchers) and research/production lockers and racks.
Mixed pressurized and unpressurized cargoesCombination of logistics support to space business park, personnel and research/logistics support.
Scheduled launches (7 to 15 days)Driven by expressed user needs for space access, including space tourism market data.
Rendezvous and docking capabilityAccess to space business park
Pressurized cargo transferPeople and Pressurized payload transfer to interior of space business park.
High reliability, approaching airliner reliabilityPublic acceptance for tourist flights. While some level of risk is acceptable, the reliability of safe transportation must be at least an order of magnitude higher than today's systems.
High system availability, with scheduled launches happening within 1 day of scheduleRoutine access to space facility for production and research will require dependable transportation to ensure return of product and to ensure continued operation of manufacturing system. Significant revenue interruptions if system downtime. Tourist market will need to meet scheduled launches as part of packaged "tour" to space business park, and market survey results indicate <1 day schedule reliability.
Capability to handle space station-type modules and hardwareDriven by need to reduce development and risk. Maximizing the use of space station technology and system implies need to accommodate space station standard lockers, racks, and modules.
Return cargo, approximately the same as up cargo requirementsReturn cargoes will include mixed personnel and cargo; pressurized and unpressurized payloads. Return cargo mass will approximate up-cargo masses since majority of flights will be logistics flights, transferring people to and from the business park and exchanging production and research lockers and racks.

Figure 3.7.6.5-1. Characteristics of Space Transportation System Needed To Support Space Business Park

3.7.6.5.2 Transportation System Capabilities

The space transportation capabilities needed to support the space business park include:

  1. Capability of launching and returning payloads.
  2. Payloads of 15-foot diameter and up to 60 feet long. This capability is driven by the use of space station technology to reduce development and cost risks. The diameter volume is driven by the use of space station orbital modules and subsystems, and the use of space station logistics modules for resupply.
  3. Payloads of up to 30,000 lb into a 51.6-degree orbit at 220 nmi. For the medium-probability demand case, this value seemed to provide an optimum enough demand per flight to meet the schedule flight rates at about 7 to 10 day intervals.

The 51.6-degree orbit assumes that the space business park will be placed into a higher inclination orbit to maximize its ground viewing opportunities, and to place it in the vicinity of the international space station currently under development by the U.S., Japan, ESA, Canada, and Russia. The payload requirement is driven by the need to transport a mixed cargo of personnel and resupply lockers and racks. This translates into an equivalent of about 55,000 lb into a 28.5-degree, 150 nmi orbit for comparison with other market areas. The sensitivity of this payload sizing is shown in Figure 3.7.6.3-11, above.

3.7.6.5.3 Ground Handling

It was assumed that standard modular payloads, using the space station interface and packaging system would be used (lockers, racks, and modules). Ground handling should be relatively straightforward for the space business park because there are no new interfaces and very little checkout required. A simplified ground handling process, driven by the scheduled access characteristics for the space business park, was assumed to be in place. Ground handling systems for user systems would follow much of the existing procedures in place for space station payloads and systems. The research lockers and the passengers are loaded just before launch and the rest of the interfaces are standard for each flight.

3.7.6.5.4 User/Space Transportation System Interfaces

The primary user/space transportation system interface is through the logistics module described in Figure 3.7.6.3-12, above. This module is identical to that currently planned for the international space station, and the user interfaces to the logistics module are identical. This module would be docked to the business park when the launch vehicle docked or be separated from the launch vehicle and berthed using a remote manipulator arm. The logistics module should be self-contained with respect to power and ECLSS.

Primary interfaces from the module to the space transportation system would be structural, with some data interfaces required.

3.7.6.5.5 Improvements Over Current

Improvements over current space transportation systems needed to support the space business park are evolutionary in nature. It is possible to deploy and sustain the space business park using the space shuttle and other launch systems, but if current costs and complex operations and integration procedures decrease the user demand to a level at which the system is no longer viable as a business venture.

3.7.6.6 Business Opportunities

As shown in Section 3.7.6.3.3, the space business park venture as outlined above produces a commercially attractive 20% IRR within 10 years of operations. Net present values (NPV) over the life of the project for various payback periods and launch costs are shown in Figure 3.7.6.6-1 below.


Figure 3.7.6.6-1. Net Present Values for the Nominal Space Business Park (Medium-Probability Demand Model)

3.7.6.7 Conclusions and Recommendations

The LEO space business park, providing a mixed-use commercially oriented facility in orbit, appears to offer an attractive business opportunity at transportation costs of less than about $560/lb. As a commercial development activity, modelled after terrestrial mixed-use business parks, the venture falls within rough order of magnitude commercial criteria for financial requirements, rates of return, and scale. However, this conclusion is highly dependent upon the provision of a new, low-cost space transportation system, and the capture of increased market demand from research/manufacturing options and space tourism.

It is recommended that further analysis be peformed to develop a more complete preliminary design of a commercially procured space business park. This would answer specific questions about the subsystems design and systems cost, based upon space station technologies and operational experience. Similarly, further market analysis should be performed to reduce the uncertainty in the research/manufacturing markets and the space tourism markets.


Footnotes

  1. From Rockwell International SSD91D0771 "Orbiter Space Particle Impact Hazard Study,” Oct. 1991.

  2. Shield material is basic structural materials: window panes, aluminum sheeting, and so forth. The fabrication cost of such structural items is typically less than $100/lb, which is significantly less than typical transportation costs and substantially less than for other elements of the spacecraft on a $/lb fabrication cost.

  3. For simplicity in these calculation (less than 1% occurrence) velocity in LEO of 15 km/sec^2. To increase the factor of safety, it is assumed the density of the window/frontal surface memberthe worst case is assumed -- a solid window pane of sufficient thickness to stop a heavy metal particle of debris (density 10 g/cm^3) traveling at a low-probability is increased sufficiently to decrease the probability of breakage by an order of magnitude, or to withstand a hit from a particle whose probability of hit (flux) is one-tenth the reference case. From SSD91D0771, for a satellite in LEO 28.5-degree orbit, it is found that the flux decreases by an order of magnitude with an increase of mass in the particle by 11 to 12 times. It is found that penetration depth (including cracking) is proportional to the relative mass^0.4. Thus, increasing the thickness of pane of glass by approximately 2.5 times would allow the withstanding of particles of sufficient size to reduce the probability of breakage by an order of magnitude.

  4. Thermal Sciences Corporation, "Methods for Disposal/Recovery of Orbiting Space Debris, 5 July 1993. U.S. Patent 4991799, "Space Debris Sweeper" to NASA/JSC (Andrew Petro).

  5. This assumes three 5,000-lb active sweeper systems, based upon the JSC/Petro space sweeper concept. These would not remove debris but break up larger chunks into chunks small enough that shielding could handle them. This estimate assumes 1 GEO sweeper (LEO equivalent mass 45,000 lb), 1 LEO 28.5-degree sweeper (5,000 lb), and 1 polar orbiting sweeper (LEO equivalent mass 10,000 lb).

  6. The Earth Watch lay--research resident assistance program and others provide interested lay persons the option to participate in scientific research for a fee. These types of programs include such options as whale watching in the Pacific Northwest as part of oceanographic studies, dinosaur fossil excavation in the Dakota badlands, archeological site excavation in the U.S. Southwest, and forest ecological surveys in Central and South America. Costs of these volunteer research expeditions are roughly equivalent to adventure vacations.

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3.7 New Missions
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