There’s another reason for the atmosphere’s sudden pull: star power. “Elon Musk with SpaceX and Jeff Bezos with Blue Origin have made private space enterprise a lot more public,” Dickinson says. “Musk has a real following … Everyone wants to be the next SpaceX.”
In addition to pulling off the feat of joining leading government space agencies in building rockets and transporting people into space – including four astronauts who returned from the International Space Station on May 2 – Musk’s 19-year-old company launches lots of satellites. Over the past few years, it has launched some 1500 of its Starlink broadband megaconstellation satellites into space. SpaceX has, in fact, single-handedly doubled the active number of satellites in orbit.
The Wild West in space is mirrored by an investment Wild West on Earth.
That’s exhilarating but not an entirely positive turn of events. Earlier this month, a 20-ton defunct Chinese satellite crashed into the Indian Ocean – though there was a distinct risk the satellite could have hit an inhabited area. Today, more defunct satellites are orbiting the Earth than functioning ones, and the more satellites companies dispatch into space, the more crowded it gets. By 2030, an estimated 100,000 satellites will be orbiting Earth, and there’s no global regulator that makes sure defunct ones are safely brought back.
Vast though it may be, space is getting congested. That increases the risk of collisions, including the space version of highway multicar pile-ups that could cause enormous harm to satellites that every single one of us relies on for navigation, communication, and a growing number of other aspects of daily life. And consider this: Such a collision could cause an environmental disaster that would fill space with debris and deny future generations access. We, Earthlings, thus face a double jeopardy: an overcrowded and thus dysfunctional space and a congested cosmos whose junk will, Chinese satellite-style, drop down on us.
Space sensors exist, but they can’t keep up with the satellite boom. “There is such a rapid growth in the deployment of satellites. The questions is how can you track them all,” Dickinson says.
“Rules in space date back many years, and the people who introduced them didn’t have this amount of traffic growth in mind. The UN has a number of committees that set standards, but it’s up to the national space agencies to implement them. It’s truly a Wild West.”
When space companies go bust, nobody is responsible for retrieving their equipment from space.
The Wild West in space is mirrored by an investment Wild West on Earth. When Momentus joined the stock market, it wasn’t propelled purely by its own momentum but with a push from a newly fashionable financial vehicle called SPAC, or special purpose acquisition company – also known as a blank-cheque company. SPACs are shell companies that have no operations or business plan; they can be set up by investors to merge with another company and help it quickly go public. These shell firms are booming.
In January alone, US-based SPACs raised $US26 billion, more than a third of the amount raised by SPACs in 2020, which, in turn, was a staggering six times the amount raised by SPACs in 2019. Last year, in fact, the little-known SPACs raised nearly as much as all of that year’s initial public offerings (IPO) combined. The situation is reminiscent of tulipmania in the 17th-century Netherlands, when people energetically invested in tulip bulbs because they feared missing out on the next big thing.
Combine a cosmic rush involving lots of start-ups with expensive kit and unproven capabilities (not to mention commercial potential) on one hand and access to SPAC financing on the other, and you get the makings of a space bubble.
“Many firms taken public by SPACs have little to show in terms of business plan or revenue, in some cases triggering shareholder lawsuits by disgruntled investors,” wrote Ivana Naumovska, a professor at INSEAD, in the Harvard Business Review in February, warning “the SPAC bubble is about to burst.”
It’s a sign of the red-hot space start-up market Momentus managed to go public at about $US1 billion despite having to part with its CEO and key innovator, Mikhail Kokorich. The US Committee on Foreign Investment, the regulator in charge of scrutinising business deals on national security grounds, declared Momentus a foreign entity as Kokorich and his co-founder, Lev Khasis, are Russian citizens. Khasis is, in fact, first deputy CEO of Sberbank.
To make sure Momentus could be considered American and thus be allowed to proceed with its stock market plans, Kokorich swiftly removed himself from Momentus’s operations and resigned in January. Khasis, meanwhile, put his shares (officially owned by his wife) in a blind trust.
The world has seen bubbles before. In 1637, the Dutch tulip bubble suddenly burst. In 2001, online grocer Webvan declared bankruptcy, only two years after a frenzied IPO, setting in motion the first dot-com bubble. But if space start-ups go bust, it’s a problem not just for their investors but for all of us.
When space companies go bust, nobody is responsible for retrieving their equipment from space. That means all those satellites being sent into orbit could stay there for thousands of years and collide with the other pieces we keep sending into space – or come crashing back to Earth. As HAL 9000 says in Stanley Kubrick’s 2001: A Space Odyssey, “This mission is too important for me to allow you to jeopardise it.”
Elisabeth Braw is a fellow at the American Enterprise Institute and a member of the UK National Preparedness Commission.
— Foreign Policy
This Article firstly Publish on www.afr.com