Militarising space threatens its commercialisation

Line of Defence Magazine, Winter 2018

Rocket Lab Still Testing launch
New Zealand enters the commercial space race: Rocket Lab 'Still Testing' launch, 21 January 2018.

Nicholas Borroz, a business intelligence consultant and doctoral candidate in international business at the University of Auckland, sees the militarisation of space as a major threat to its commercialisation.

“We will strengthen our alliances and attract new partners, not just by sharing data from monitoring, but by training and working closely with each other in space operations.”

These are the words of the United States Secretary of the Air Force, Heather Wilson. In April, she stated her department would provide space training to allied countries’ militaries. She cited China and Russia as threats, saying they “are developing capabilities to disable our satellites.”

This initiative comes after President Donald Trump called for a “Space Force”, a branch of the military that would operate off-planet. China and Russia, in turn, now recognise space as a security domain – both countries are reportedly developing anti-satellite weapons. The United States has for its part demonstrated its ability to bring down satellites with missiles.

The potential for conflict in space is real, so much so that an international consortium is right now pulling together a manual on the international law of military space operations.

Militarisation is not the only phenomenon marking a new era in human space activity. There is also increasing commercialisation of space. SpaceX is spearheading this with its development of dual-use reusable rockets that can go to other planets, or simply jet us to other continents.

But this is just the tip of the iceberg. There are plans in the works for asteroid mining, space tourism, and even orbiting luxury hotels.

Closer to home, earth-facing satellites are providing all sorts of business services by providing useful intelligence about human and natural systems on this planet. The financial industry has taken note, with investment firms now funnelling capital into space ventures. Space is now something worth betting on.

The problem in a nutshell is this: militarisation of space threatens its commercialisation. And this is an issue because private firms are the main driver behind space exploration today. Public agencies like the National Aeronautics and Space Administration (NASA) and the European Space Agency (ESA) still have significant operations, but firms are now taking leading roles.

It has taken a private company like SpaceX, for instance, to revive interest in astronauts going to Mars. But business in space is still heinously expensive – the price tag on a launch of SpaceX’s Falcon 9 rocket is over USD 60 million. And as is true for any type of business, when risk increases, costs rise. And militarisation of space increases risk, whether real or perceived.

Directly, firms will fear that, because of militarisation, governments may target their assets in space. Firms working with the United States military, for instance, may fear that China or Russia will bring down their satellites in future space wars.

As has been often noted, these attacks would unlikely be kinetic. There will not be dogfights or space marines in space – at least not any time soon. More likely is that an attack would take over or disable a satellite, rather than blasting it to smithereens. Regardless, that means the asset will no longer generate revenue for the firm.

No matter what form satellite attacks take, they will lead to a more indirect concern for all companies, whether or not they are exposed to political risk: the more destroyed or disabled satellites there are, the more there will be space junk, clouds of destructive uncontrolled objects hurdling in orbit.

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Space junk is already a serious concern. The 2009 impact between American and Russian satellites was one of the highest-profile incidents to date. The United States Commerce Department is bringing the matter under its portfolio, and the European Space Agency is warning about the situation. Interstate conflict extending into space would certainly make the space junk problem more severe.

If firms fear warfare will hurt their satellites, directly or indirectly, there will be less civilian business.

Militarisation will not be a complete deal killer, but it will have a slowing effect. Firms’ costs will rise because they will need to conduct political risk analysis, they will need to build in redundancies for potential disaster scenarios, and they will have more concern about unknowingly working with agents of enemy states, spurring greater investment in due diligence programs.

All this means firms will have higher costs, which in turn will undermine profitability and discourage investment. In essence, militarisation will be like pushing the pause button on humanity’s collective spacefaring project, or at least slowing down its speed significantly.

Of course, one can argue that militarisation will actually end up catalysing advances in space technologies; while militarisation will slow down some areas of commercialisation, it will speed up others.

We already know this happened as a result of the Cold War. The rockets that first got us off earth were cousins of those that could rain down nuclear destruction. And the GPS functions on your smartphone are provided courtesy of satellite descendants of Sputnik (or rather, descendants of its adversaries on the other side of the Iron Curtain).

If we start seeing the United States, China, and Russia building up their space military capabilities, there will certainly be huge opportunities for government contractors. Militaries would love to be able to send hardware into space more cheaply, which would be a boon for companies specialising in launch technologies.

In short, there will be ample prospects for firms who can assist governments take out or defend satellites.

For instance, New Zealand, a recent entrant to the $320 billion space market with its young space agency just founded in 2016, stands to commercially benefit from some aspects of militarisation.

Private firms such as Rocket Lab will certainly be affected by the upcoming star wars. The firm was incorporated to be based in the United States and has had contracts with the US government’s Defense Advanced Research Projects Agency (DARPA). Trying to frame itself as the “FedEx of space” in the US, a country leading the militarisation of space, means there will be plenty of military contract opportunities Rocket Lab can exploit.

But although there is certainly some upside for firms such as Rocket Lab, the overall impact of militarisation will be negative.

Fears about political risk and space junk will grow if militarisation continues, which will in turn raise costs, thereby slowing civilian commercialisation of space.

And let us not underestimate the wider negative consequences of war in space. How space war will occur is speculative, but it a safe bet to assume it will likely hurt all humans, regardless of their nationality. Dependence on telecommunications satellites knows no borders.

To be sure, space war will not cause many “casualties” in the traditional sense of the word, but the impacts will be global. And how war in space will interplay with more traditional conflicts on earth is yet to be seen.