🌌 A few quick questions for ... economist Ian Lange on the economics of space mining

The need for clean energy here on Earth could make obtaining space resources worth the effort

Quote of the Issue

“Space has always played an important role in our lives, a lynchpin in the modern era, with so many components of everyday life either due to, or reliant on, space and its players. But the space economy is also now inflecting, and we believe will become a multi-trillion dollar market within the next two decades.” - Goldman Sachs, 2017

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The Q&A

🌌 A few quick questions for ... economist Ian Lange on the economics of space mining

The increasing demand for the minerals necessary for clean energy production is forcing scientists and economists alike to think outside of the box — and even outside of the planet. Asteroid mining may represent the future of mineral extraction … but just how realistic is that future? And what would the economics be?

To find out, I asked some questions of Ian Lange a professor in the Colorado School of Mines Space Resources Program and co-author of the new paper “Mining in space could spur sustainable growth.” From the abstract of that research:

The clean energy transition could increase the demand for certain minerals more than ever seen. While there is little concern about running out of minerals on Earth, the quality of mineral deposits has decreased. This makes mining more detrimental to the environment and increases the social cost. Another source of minerals is at the edge of our technical ability: celestial bodies such as asteroids. Better understanding the trade-off between mining terrestrial deposits at higher environmental and social costs and learning how to extract higher-quality deposits on celestial bodies is the goal of this analysis. We line out a research agenda on how mining in Space could potentially contribute to sustainable growth on Earth.

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1/ James Pethokoukis: How close, technologically, are we to the ability to do space mining, that it’s worth creating an economic model that would explain why it would make sense or how it could happen?

Ian Lange: I'll condition, first, on the fact that I am an economist and not an engineer. … I would say we're not close. We're at our second iteration of firms that are interested in space mining and they are, I would say, being smarter than the first iteration. They are thinking about near-term revenue sources with the goal of a long-term revenue source of space mining. But they're thinking about having some revenues now. There clearly are legal issues around the Space Act and the Outer Space Treaty that are being sorted out.

We're further along in getting water off the moon, just in terms of a lot of people testing how that would work. Obviously, you go grab some dirt from the moon, you can’t just shove that in a battery and be like, all right, now I got the wall of my spaceship. You need to refine it. The way it worked terrestrially is you grab some dirt and you concentrate it and you refine it and then you have copper instead of dirt with four percent copper. In my mind, that's still a little science-fiction space-age. Although somebody who loves outer space is going to complain, “Ian, you're an idiot. It's totally ready to go right now!”

2/ It seems to me that we wouldn't even be having this conversation if there hadn't been at least one big sort of technological advance, and that’s the big decline in launch costs. Am I right about that? Is that what moves this towards something worth creating economic models about?

Yeah, that's like an enabler in some sense. Basically, nothing can happen if you can't get there or you can’t really try to go explore. Launch costs are falling. To be fair, there's a debate as to whether launch prices are falling because there's one big provider, and we all know, as economists, what oligopolies and monopolies are like. So, yes, clearly costs have fallen. Like I said, I don't know how much prices have fallen, but they probably have fallen since, say, 1985, so we can have these kind of discussions a little more because of that enabling technology.