The Commercial Space Race

Embry-Riddle faculty and alumni space industry experts predict new thriving, wholly commercial space markets

The race to commercialize space is accelerating. For decades, governments — intent upon establishing a national presence in this new frontier — have mostly footed the bill. But now, commercial enterprises are getting into the act in a big way.

“The amount of revenue generated by commercial space activities now exceeds that being spent by the world’s governments. This is a dramatic shift from early space activities, in which revenue was closely tied to government expenditures,” says Sonya McMullen (’00, WW), a Worldwide Campus assistant professor who researches the commercial space industry.

This new space revenue reality is setting the stage for a wave of pure space commercialization.

“I think we’re right at that barnstorming era — 1920s or so, and right at about the 1930s, in terms of the government airmail contracts for the aviation industry,” McMullen says. “The government told the airlines, ‘We don’t want to subsidize you forever, so go develop bigger airplanes where you can carry people.’” That’s what’s happening with the space industry, she says. “I think we’re at the tipping point.”

A Wide Open Space Market

Lower entry costs are fueling the new space economy, according to Kelly Whealan-George (’15, DB), associate professor and chair of the economics discipline for the Worldwide Campus.

“There’s a lot of venture capitalists out there,” she says. “It’s now [a] space jam; everyone is getting into the business. Why? Because it’s more affordable — and when it’s more affordable, it opens up the market.”

“The small satellite industry is hugely growing,”

Robyn Ringuette (’97, DB), vice president of Liquid Propulsion at Virgin Orbit

And an open market is usually a growing market. In her 2013 study, Whealan-George predicted that the global space industry would grow 18 to 40 percent by 2030, depending upon certain key economic drivers, such as geopolitical and socioeconomic developments. So far, her projections appear to be on track. With a total estimated $339 billion in economic activity (according to the 2017 Satellite Industry Association’s State of the Satellite Industry Report), the space industry has grown 7 percent from 2013 to 2016.

McMullen says private launch businesses, like SpaceX, have disrupted the space economy by breaking the long-standing $10,000-per-pound cost barrier. “That’s dirt cheap,” she says, “especially when you consider that it cost more than $1 billion to launch the last space shuttle [in 2011].”

Money Maker

At 77 percent of the total global space economy, satellites are the driving force propelling the industry. “The big commercial items are always going to be telecom. They have a satellite asset, they buy a ride on a rocket, and they have users on the ground. That’s how they generate their money,” says Ryan Kobrick, assistant professor of commercial space operations at the Daytona Beach Campus.

Alumni Talk About Commercial Space

We asked Embry-Riddle alumni what they think about the developing commercial space industry. Here’s what they had to say.

According to the 2017 Satellite Industry Association’s report, satellite numbers have increased by 47 percent in the past five years, thanks in large part to small or very small satellites in low Earth orbit (LEO).

“The small satellite industry is hugely growing,” says Robyn Ringuette (’97, DB), vice president of Liquid Propulsion at Virgin Orbit, a recent spinoff of Virgin Galactic. Satellites have gotten smaller and cheaper to build and launch, Ringuette says, reducing business risk and enabling more companies to enter the market.

Virgin Orbit plans to further cut costs of satellite launches with its LauncherOne program, which is set to deploy for the first time in 2018. LauncherOne will offer low-cost, quick-turnaround launch services to the small-satellite industry, with fewer restrictions on launch timing, Ringuette says.

Instead of launching from a fixed site in Florida or California, LauncherOne will detach from the wing of a Boeing 747-400, called “Cosmic Girl,” while it’s flying 35,000 feet over the ocean. Once released, the LauncherOne rocket will carry the satellites into orbit.

Another innovation is taking a strength-in-numbers approach. This year, several companies have plans to begin installing in LEO huge groups or “constellations” of satellites that number in the thousands, McMullen says. These could provide global phone, internet and/or imaging services with no service interruption as early as 2022.

“More people in the world have cellphones than there are toilets,” McMullen says. The profit potential is huge, especially because it’s cheaper than ever before to build and launch satellites, she says.

Space Clutter

But there may be a problem: Space debris.

“I think it’s important that we’re aware of orbital crowding,” Kobrick says. “Companies that are making the jump to making these constellations for things like global internet have a huge responsibility in leading how that is done.”

Trash in the Global Commons

There’s a huge amount of human garbage orbiting Earth. The U.S. Strategic Command (USSTRATCOM) tracks about 23,000 human-made objects in orbit that are bigger than a softball — about 10 cm in diameter. Of these, only about 1,500 are functioning satellites, says Moriba Jah (’99, PC), an associate professor tracking orbital debris at The University of Texas (UT) at Austin. Even the smallest objects — of which there are millions — can cause significant damage to spacecraft because they travel at speeds of up to 17,500 miles per hour.

Jah likens Earth’s orbit to a global commons (not in a legal sense), where countries and companies acting in self-interest don’t always concern themselves with the impact of their collective actions. “At this point it’s the spray and pray model: They’re throwing things up there and hoping they make sense,” Jah says.

The space junk tracked by the USSTRATCOM consists mostly of pieces of deteriorated satellites, some of which have been in orbit for decades. Aaron Rodzinak (’94, PC), a spacecraft systems engineer at Ball Corporation, says NASA got serious about orbital crowding in 2009 when a Russian military satellite crashed into a commercial American satellite. His company works with NASA’s Jet Propulsion Laboratory every few months to alter orbits on programs like CloudSat (a NASA Earth observation satellite), to prevent it from being damaged by debris clouds.

NASA’s debris mitigation guidelines, issued in 2011, include directions on preventing satellite explosions and implementing disposal orbits at end-of-life. Other countries and the European Space Agency have issued similar guidelines. NASA must follow its own rules, but private companies do so voluntarily.

“In practice, countries work together to avoid collisions because it is mutually beneficial,” Rodzinak says. “But there is currently no controlling authority for our final frontier … yet.”

Jah, who worked on the Air Force Research Laboratory’s space object detection, tracking, identification and characterization algorithms for 10 years, is conducting research at UT Austin to provide a public, transparent and data-rich object catalog that will lead to informed policy decisions over space activity.

The Department of Defense’s (DoD) space debris database lacks transparency in its methods, he says, for understandable reasons. This leads to ambiguous conclusions.

“Whenever someone is launching rockets into space, they go to that public catalog. The DoD will provide warnings, but then it’s ‘Brace yourself.’ The math and physics are simplified, and there’s no realistic and consistent measure of uncertainty.”

Jah has a solution. “I’m trying to create a ‘data lake’ that’s open and accessible and will allow people to add to and retrieve from it. People will be able to use that data lake to draw their own conclusions, and we can all compare conclusions and see which ones agree and which ones don’t,” he says.

“My motto for my research is: If you want to know it, you have to measure it. If you want to understand it, you have to predict it. If you can’t predict it, you don’t really know what’s going on.”

The U.S. Strategic Command tracks about 1,500 functioning satellites orbiting Earth, but there are millions of human-made objects and debris up there, says Moriba Jah (’99, PC), an astrodynamicist and associate professor at The University of Texas at Austin. Industries and governments alike are concerned about the growing space trash problem. [See sidebar: Trash in the Global Commons.]

Tow Trucks in Space

Scott Weintraub (’16, DB), president and CEO of Weintraus, which is located in Embry-Riddle’s Research Park in Daytona Beach, Florida, says his company plans to stop the space debris epidemic. The solution: Hercules II, an on-orbit robotic services space tug that can dock, repair, refuel and maneuver other spacecraft in LEO. Weintraus expects to launch its first operational vehicle in 2022 and a second vehicle with robotic arms by 2024.

“For non-space people, I call it a tow truck,” Weintraub says. “Imagine if every time your car breaks down, you have to buy a new one. You can’t take it to a mechanic. It stays on the road where it stopped. That’s the analogy in space right now.”

In addition to Hercules II, Weintraus is designing a fleet of modular satellites with standardized connectors. Weintraub says on-orbit services like his could conceivably extend a satellite’s average lifespan to 100 years.

“We can stop the space debris problem if we change the way satellites are manufactured — meaning they’re no longer replaced, they’re just fixed and reused. And when they do die, we would have the option to go to them and send them to burn up in Earth’s outer atmosphere or to the sun.”

Space Tourism

Space tourism is another market on the horizon, and it’s garnering attention from a wealthy, thrill-seeker niche of the population. A 2012 study by the Tauri Group titled, Suborbital Reusable Vehicles: A Ten-Year Forecast of Market Demand, estimates “40 percent of the interested high-net-worth population, or 3,600 individuals,” would fly within the first 10 years of space tourism becoming operational. The study included surveys of 200 people with a net worth of $5 million or more.

But high ticket costs could be an issue in making the business case for space tourism, Kobrick says. A 10- to 11-minute space experience presently costs around $150,000 to $200,000. “They need to get it down to where a trip to space is like an expensive family vacation, like taking a family to Australia. That’s what’s going to make a difference — if the vehicles are ready, of course.”

space tow trucks

Jeffrey Osterlund (’89, DB), senior manager for Space and Missile Operations engineering capability integration at The Boeing Company, agrees. “I would buy a ticket, but I don’t have that disposable income, and 99 percent of the population doesn’t have that disposable income,” he says.

“[Still] the space tourism market is young, and we know from experience that as markets mature, they open for a variety of reasons to more people. There is no reason to think that space tourism or any other commercial space endeavor will not proceed in the same way as it did for commercial aircraft in the 20th century.”

Osterlund, who works directly on the CST-100 Starliner spacecraft, says tourism isn’t the only outlet for space transportation vehicles. The Starliner is in development for NASA’s Commercial Crew program, but it’s also a potential platform for space tourism and for private transportation to space habitats for research and other purposes. Its inaugural mission is set for the fourth quarter of 2018.

“We’ve been in discussions with global partners in providing transportation services for them, to fly them up to a destination and then fly them back,” Osterlund says.

To date, no commercial space tourism missions have flown, but Virgin Galactic predicts a 2018 launch of its human transport vehicle, SpaceShip Two. Blue Origin is also planning a manned launch of its New Shepard capsule in 2018.

But Edward Ellegood (’15, DB), publisher of the Florida SPACErePORT and a business development analyst at Saalex Solutions, cautions: “It’s been a decade since the first flights were proposed to have taken place. Virgin Galactic and XCOR, which is now out of business, and a handful of others, were all expected to have flown for years now. For various reasons it hasn’t happened, primarily because of safety.”

Kobrick agrees. “The joke in the industry is that suborbital tourism is always two years away.”

While its future as a viable space market remains uncertain, McMullen says space tourism is much more than a joyride. “Just as barnstorming was for aviation, it’s about building excitement for the industry and raising money to continue to develop new aircraft,” she says.

Powering Space

Another industry garnering lots of investor attention is mining in space. Joe Landon (’01, DB), chief financial officer for Planetary Resources, says his company plans to mine natural resources, primarily water, from asteroids; convert that water to fuel; and set up outposts in space to power the developing space industry. And it will all be done robotically.

“Basically, we want to open gas stations in space,” Landon says.

Planetary Resources is targeting late 2020 for the launch of its first asteroid exploratory mission. The company estimates that there are more than 16,000 near-Earth asteroids that share a similar orbit, with an estimated 2 trillion tons of water available in the form of ice.

Beyond creating fuel, long-term plans include mining asteroids for structural and precious metals, which would be used for construction in space and in-space manufacturing of equipment, Landon says.

“Mining resources to ship to Earth wouldn’t be cost effective,” he says. Rather, he explains, as the space economy develops and millions of people begin to work and live in space, there will be a need to have fuel and resources available in space, since it will be too costly to ship everything from Earth.

Point-to-Point Orbital Transportation

A space market that’s a little closer to home involves suborbital and orbital point-to-point travel. Oscar Garcia (’04, DB), partner, chairman and CEO of InterFlight Global, chairs the Standards Working Group for the Federal Aviation Administration’s (FAA) Commercial Space Transportation Advisory Committee (COMSTAC), which is working to develop standards for this industry. Given the existing demand for long-distance air travel, he sees disruptive potential for the point-to-point transportation market.

“When you’re talking about transporting people on Earth very far, very quick and using flight trajectories that reach space to do so, the size of that economy alone, in time, could be another half a trillion dollars — as big as the whole space economy today, combined. That’s a game-changer,” Garcia says.

Several companies, including SpaceX with its Big Falcon Rocket, are working to develop spacecraft that could transport people from a departure point on Earth to anywhere in the world in less than 45 minutes.

“Just as barnstorming was for aviation, [space tourism] is about building excitement for the industry and raising money to continue to develop new aircraft.”

Sonya McMullen

Garcia expects supersonic (speeds above Mach 1) and hypersonic (Mach 3 and above) aircraft to become operational first, paving the way for suborbital and orbital point-to-point transportation. “By 2025, we should have a couple of commercial aircraft types flying supersonically all over the world,” Garcia says.

Once supersonic aircraft become commonplace and are successfully integrated into the air space and airport systems, orbital and suborbital transportation models will fully evolve, he predicts. Garcia, who turns 50 this year, says he expects to see suborbital and orbital point-to-point, high-speed transportation operating in his lifetime.

In addition to his work with COMSTAC, Garcia is an executive committee member of ASTM Committee F47, which is developing standards for commercial spaceflight. “We are cautiously optimistic that the way to future regulations will be guided by industry consensus standards as a means for regulatory compliance, like aviation is doing more and more with the FAA,” he says.

Legal Hurdles

Garcia says the regulatory framework for point-to-point suborbital and orbital transportation will likely be an extrapolation of existing international air commerce laws. “I expect the speed of technology there and the speed of regulation and global consensus to be pretty much aligned.”

Unfortunately, that’s not the case for some other emerging space businesses, he says.

Antiquated U.N. treaties that date back to the 1960s need to be updated, he says. “The treaties were signed so long ago in the Cold War context that they never predicted a commercial space economy.”

The treaties are rather general, agrees Diane Howard, assistant professor of commercial space operations at the Daytona Beach Campus and organizer of Embry-Riddle’s annual Space Traffic Management Conference. This is why there is a need for countries to put national space laws into place, she says.

Is Maritime Law an Option for Space?

Edward Ellegood (’15, DB), publisher of the Florida SPACErePORT and a business development analyst at Saalex Solutions, says there are arguments for using maritime law for space operations.

“In shipping, it is common practice to flag your vessel in a country that has laws favorable to your operations,” he says.

Countries like Luxembourg are developing legal frameworks that encourage space enterprise on this model. As of November 2017, the space industry represented 2 percent of Luxembourg’s annual gross domestic product.

The country is attracting foreign business, as well. The asteroid mining company, Planetary Resources, established a European headquarters in Luxembourg after the country invested nearly $28 million in its research and development.

This tiny European country may become a leading “flag carrier” in the new space economy.

In mature space markets, like satellite telecommunications, there is a solid regulatory framework. For emerging markets, like space tourism, the United States has taken a relatively hands-off approach to commercial space regulation in order to encourage investment and innovation, she says.

While some risk is necessary for industry growth, Howard says there is also a need for legal certainty. For example, private businesses, like those involved in space mining ventures, want legal assurance that their investments are sound and protected under the law, she says.

Landon says the 2015 Spurring Private Aerospace Competitiveness and Entrepreneurship (SPACE) Act provided Planetary Resources with the affirmation it needed to continue its research and development. The act essentially allows U.S. citizens to own, transport and sell resources obtained during commercial operations in space.

With the original idea for the law coming from the U.S. Homestead Act of 1862, the SPACE Act stipulates that the company or entity that arrives first at a particular asteroid has the right to non-interference from others, Landon says. “We believe that there are no remaining legal or regulatory hurdles for us to begin conducting our business.”

Planetary Resources is working to build consensus for this law among other countries, as well. Luxembourg has already passed similar legislation.

Is Space the New Wild West?

While laws exist for space activities, the problem is, “they’re ambiguous,” Ellegood says. “There isn’t even a common, accepted, universal government definition of where space begins.”

Additionally, there is little, if any, policing of the existing treaties and legislation.

“There’s no enforcement that I know of that will deter or have consequences, other than condemnation from the global community,” Garcia says. “For example, in 2007, China blew up a satellite with a missile and created thousands of big objects [space debris] and all they said was, ‘Sorry.’ A cheap shot up there can do a lot of damage to everyone.”

Government funds have helped fuel the commercial space race, but given the growing geopolitical tensions, national alignments could ultimately prove hazardous to business.

“Local rivalries between countries, no matter how big or small, are the biggest stumbling blocks to a smooth launch of mankind’s economy into space,” Garcia says. “Right now, the biggest stumbling block is trust between the United States and China, and then Russia and then everybody else.”

Human Returns on Investment

In light of these issues, Howard says there is a continued need for space diplomacy among all stakeholders or “space actors,” so that the U.N. mandate that space activities serve the interest and benefit of all humankind is upheld.

McMullen agrees. Putting economics aside, the human benefits of a thriving global space economy are nearly limitless, she says.

“Today, you have people in the middle of nowhere, in Africa, building dams because they can access YouTube to see how to build a dam, or a water filtration system, or an irrigation system — because now they have access to information. Imagine what that information will do for places that are really oppressed. The sociological potential of just getting information to people — there’s a lot of hope, I think, from that.”

Space Industry Partner

Embry-Riddle is preparing the next generation of space industry leaders for take-off and partnering with businesses in research and development that will grow the space economy.
The university offers a variety of space-related degree programs that include astronomy and astrophysics, astronautics (aerospace engineering), space physics and spaceflight operations. Additionally, faculty and students are researching and developing new technologies, including space robotics and control systems, small satellites (CubeSats) and advanced rocket propulsion systems.

Embry-Riddle is an active partner with Polar Suborbital Science in the Upper Mesosphere (PoSSUM), a nonprofit organization that conducts upper-atmospheric and space technology research. The university hosts training sessions for PoSSUM scientist-astronaut candidates and helps test emerging technologies for its bioastronautics program.

Specialized facilities, such as the Prescott and Daytona Beach campus observatories, the Cosmic Ray Lab, the Laser Interferometer Gravitational Wave Observatory (LIGO) Lab and the Laboratory for Exosphere and Near-Space Environment Studies are creating new knowledge to help achieve the next great step for humankind in space.

A conduit for the discussion of emerging space markets and related issues, Embry-Riddle hosts the annual Space Traffic Management Conference (see related story this issue [link to Chatter: Space Traffic Management Conference]). And, its Spaceflight Operations, Aerospace Engineering and Engineering Physics Industry Advisory Boards, which include space industry professionals, offer regular insight that informs the university’s program offerings, research and curricula. The university also collaborates with the Space Generation Advisory Council to promote space activities and strengthen the space workforce through education and career development.

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