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10 November 2022

The promise and perils of the new space boom

Sarah Kreps, Avishai Melamed, and Ray Jayawardhana

The surprise launch of Sputnik 65 years ago, along with the Apollo moon landings, the two space shuttle disasters, and perhaps the movie Armageddon, may encapsulate the space age in our collective memory. But these events obscure a less dramatic, yet far more frequent, activity: near-daily commercial space launches. The American commercial space industry has grown rapidly in recent years, and in turn prompted global interest in replicating its successes. But as the recent failure of a Blue Origin New Shepard rocket demonstrates, moving beyond the longstanding “slow and steady” governmental approach into the Silicon Valley-inspired ethos of “fail fast, fail forward” brings new challenges. The proliferation of commercial space activity demands better coordination and stronger oversight to minimize technical accidents and political tensions.

The growth of the private space industry is extraordinary. So far this year, SpaceX has launched 31 rockets, already matching its total for 2021, at a pace of one launch every 6.4 days and ten times as many launches as every one of its American competitors. The company is building a new launch tower in Florida, providing launch services for NASA and the Department of Defense, and operates 2,500 Starlink satellites offering internet access to a broad range of customers. Blue Origin’s New Shepard is operational, with four launches this year of which three were successful, though its range is limited to suborbital flights. The company’s next model, New Glenn, is under development. Virgin Galactic, owned by Richard Branson but also based in the U.S., advertises “space for the curious.”

The rapid expansion of commercial space activity, as well as its integration into key government programs and services, represents a leap into uncharted waters. The rise of entrepreneurial “New Space” companies will challenge the capacity of both individual states and the international community to regulate and coordinate private space activity effectively. As the cost of placing payloads in space declines, the political and strategic importance of commercial space flight will only grow. Ensuring space is governed responsibly will be essential.

National approaches to commercial space activity

As advances in launch technologies have reduced costs and lowered barriers to entry, space has become accessible to more countries and offered opportunities for corporate cachet, discovery, and profit. In the last 15 years, commercial activity in space has tripled, from $110 billion in 2005 to $357 billion in 2020, and it is projected to rise to $1.1 trillion by 2040, according to projections by Morgan Stanley.

Undeniably, the U.S. has a distinct first-mover advantage, having captured a large share of the market and demonstrated the affordability of space launches. Recognizing that space is critical for the international economy, American national security, and geopolitical competition, the Biden Administration’s recent National Security Strategy cites the “burgeoning U.S. commercial space sector” as a key instrument of international leadership and competition, especially as it seeks to influence global collaborations and update space law to match these new conditions. Already, the United States accounts for one half of all global commercial space activity, with its development of reusable launch vehicles and miniaturization of satellites opening more doors for information technology, agriculture, and national defense. Of Fast Company’s top-10 most innovative companies in the space economy, eight were American, with the top spot going to SpaceX.

But the U.S. interest in continued space dominance has not gone unnoticed or unanswered. Major geopolitical competitors such as China (Long March 8, Pallas-1, Hyperbola-2) and Russia (Soyuz-7/Amur) are actively developing their own reusable launch vehicles. China in particular has begun reform of its regulations of space privatization and invested in a broad array of commercial options, showing increasing signs of moving beyond the dominance of state-owned enterprises in favor of private companies, start-ups, and state partnerships with both. Similarly, Russia has also sought to expand its array of public-private partnerships, particularly under the auspices of the Skolkovo Foundation’s activities aimed at catalyzing the emergence of a domestic commercial space industry. However, the success of this program has been mixed, with key players inside and outside of the Russian government hesitant to establish a self-sustaining private sector. Since both Russia and China have long favored the public option and state-owned enterprises, their efforts to cultivate commercial space firms is notable—even if the extent to which they are able to break into the international launch market remains far from clear.

In addition to great powers like the U.S., China, and Russia, rising powers also see an opportunity to establish themselves amid the global space boom. India is emulating the US when it comes to commercialization and public-private partnerships, with start-ups able to launch small satellites into orbit at the Indian Space Research Organization’s Satish Dhawan Space Center. The same is true in Singapore, where the start-up Equatorial Space Systems touts a vision of “commodify[ing] rocket propulsion using low-cost, safe, and eco-friendly technologies.” Japan has also been a leader in the region, with its national space agency working with private industry to provide venture funding for commercialization efforts and seeking to leverage its history of industrial strength to become “one of the world’s new-space industry hubs.” Similarly, Israel’s space agency is providing funding for commercial start-ups, citing commercial space innovation as a way to “enhance Israel’s international status.” By out-innovating their larger peers, these and other countries aim to carve out regional niches and distinguish themselves as viable partners in the global commercial space sector.

Risks and policy challenges of new space

If Virgin Galactic’s site is to be believed, “space belongs to everyone.” But even space, at least the low-earth orbit that many small satellites will occupy, is not unlimited—and ensuring it remains open to all will require overcoming several significant policy challenges.

First, increased competition and new technological advances will drive down costs and increase launches—which in turn will fill already crowded orbits. As a result, the risk of collisions in space is set to increase, particularly if the byproducts of “fail fast, fail forward” innovation happen to fail at the worst possible time and place. The nightmare scenario would be the so-called Kessler syndrome, a condition in which space debris impacts other orbiting satellites to produce even more debris, resulting in a cascade that pollutes entire orbits with impassable debris fields for many years. Even without such a catastrophe, the surge of satellite constellations is already causing light pollution and interfering with astronomy.

Second, reusable launch vehicles complicate the global governance of space activities. Since the height of the “space race,” the international community has relied on a narrow range of treaties to organize and regulate space activities. The Outer Space Treaty, for instance, prohibited territorial expansionism in space and the placement of weapons of mass destruction in orbit, while the Rescue Agreement and the Space Liability Convention established clear guidelines for responsible behavior in space. Yet those measures are targeted primarily at state actors, and spacefaring states in particular. Although the UN Office of Outer Space Affairs (UNOOSA) and the UN Committee on the Peaceful Uses of Outer Space (UNCOPUOS) have continuously sought to keep space law relevant and mediate negotiations, the rapid expansion of commercial space activities poses an unprecedented challenge. As reusable vehicles increase the number of actors who can access space, the broader range of activities they conduct may not be addressed fully by existing space law. Moreover, opportunistic states may exploit affordable access to conduct new activities where they were previously held back by high costs; some of those activities may be legally under-defined and require concerted efforts at definition, clarification, and standardization. In particular, the simultaneous drop in launch costs, benefits of first-mover status in an expanding market, and pressures to commercialize may promote quasi-territorial claims by private actors that bypass the Outer Space Treaty’s restrictions against state sovereignty. Alternatively, reduced barriers to entry may ease the burden of states seeking to deploy infrastructure in space, which has the potential to catalyze the militarization of space by providing more valuable targets; a trend decidedly counter to the Biden administration’s moves to regulate anti-satellite weapons.

Third, the advent of commercial space firms raises important questions about oversight and accountability. Negotiating the International Space Station against the backdrop of the fraught relationship between Russia and the United States has been a challenge. Enter a host of commercial actors with varying ties or accountability to national governments and the coordination problem becomes considerably more difficult. The challenge of space commercialization creates many opportunities but may also catalyze regional organizations that fragment the world into separate and imperfectly coordinated regulatory regimes. Compounding the challenge is that commercial actors have already demonstrated their willingness to diverge from, and even contest, government policy and strategy. SpaceX CEO Elon Musk, for instance, has periodically inserted himself into debates on partisan politics at home and geopolitical controversies abroad, taking positions that differ from the stance of the American government. Musk’s comments advocating Taiwanese compliance with the One China policy or Ukrainian appeasement of Russian irredentism strongly suggest the potential for divergent preferences between public and private sector figures at a time when their collaboration is necessary for effective space policymaking. In particular, his aborted threat to end Starlink support for Ukraine highlights the leverage that new, but influential actors, in space may hold over the affairs of states as their relevance continues to rise.

The access brought by the space boom will undoubtedly leave its mark on the politics of outer space and here on Earth. However, without careful attention and guidance, we may observe as much disruption as progress.

The need for American leadership

What’s the way forward? The United States should exercise leadership, using its position as a pioneer in public-private partnerships to promote greater international coordination, and perhaps a common regulatory framework for governance of space activities. With its first-mover advantage, the U.S. has the largest space companies and should be able to exert influence on foreign governments that depend on it, especially by binding them to the American space bloc (Artemis Accords) in return for access to American services. But the United States also has a duty to promote responsible use and management of an increasingly fragile space environment, in both the political and material senses. The U.S. should advocate for regulations that enable states to take part in this acceleration of capabilities but do so under consistent rules for all players. If not, other countries may be inclined to develop alternative parallel space law regimes that favor them within insular blocs, thus limiting opportunities for coordination and cooperation.

A global regulatory regime may mean sacrificing some American advantages for the greater good, consistency, and safety. The recent move towards securing a global ban on kinetic anti-satellite weapons is an excellent model. America has the most experience with anti-satellite technologies, and their strategic value only appreciates as targetable space activities expand. But the spread of such capability internationally threatens space activities in general, prompting the current search for a common framework to eliminate this class of weapons. So too can internationally shared regulations on commercial space activities preclude riskier and unsustainable commercial practices in order to preserve space for all. Together, we can emerge from this space boom more prosperous, safer, and positioned to explore new opportunities we’ve just begun to discover.

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