Property Rights in Space, Part 2 of 2: The Unilateral System

The United States may have the ability to unilaterally institute a system of private ownership off planet.

In part 1 of Property Rights in Space, the need for a system of recognition and enforcement of private property claims for land and tangible goods was established. An overview of how property rights on earth are defended and enforced was also examined. I suggest that the earth-side model of enforcing property rights in land and in tangible goods via monetary punishments should be adapted for violations of property rights in space. In the near term, private ownership of land on other celestial bodies and goods derived from space-based activities (e.g., space mining) can be protected via fines and seizure of improperly procured goods once they reach earth. No polar orbit-based beat cops or other space police required!

Although international treaty has long been the primary tool for shaping legal relationships in space, I believe that the United States has the opportunity to unilaterally create a system of recognition and enforcement of private land claims in space and tangible goods derived from space-based activities, like lunar mining, asteroid mining, and space-based manufacturing because of the United States’ status as the largest consumer market in the world and its preeminence in commercial spaceflight activities.

Commercial operations in space will be financially bound to the earth for the foreseeable future.

Currently, the United States is the largest market for commercial space and space launch operations. Given the recent growth and success of aerospace companies in the United States, I will assume that, when space is commercially exploited and settled, the United States will still be the largest, richest market for the goods and services produced. That is, the commercial potential of the United States will be so vast that no company operating amongst the stars will be able to make a return on their investment without conducting business in the US.

This creates a unique opportunity for the US to establish private ownership rights in space because companies will be economically tethered to the United States and its laws. Because of this tethering, the US is uniquely situated to unilaterally create an enforceable system of fairness to accompany even the very first commercial space-based companies, without the enormous up front cost of building a parallel system of space-based policing vehicles, policy, and courts.

If the US unilaterally created a system of private ownership in space materials such as mined ores from a defined area or goods manufactured in space, the system could be enforced by prohibiting the sale or import of any goods into the US which were produced using materials which violate ownership claims in space the United States has recognized under the new system.

These monetary penalties would effectively bar entities operating in violation of the US system from profiting in the US market, crippling their ability to earn a return on their investment in the equipment, man-power, and time required to conduct space-based commercial activities.

Because of the United States’ financial dominance, a monetary enforcement mechanism coupled with a fair, clear path to securing claims in space recognized by the US could become the de facto space and celestial ownership regime without being enacted via international treaty. If a private, US-based company like Planetary Resources or Moon Express begins mining operations of the moon or an asteroid before an international legal consensus has been reached on who owns the ore when it is returned to earth, the international community may be beaten to the punch.

Despite the circuitous path some legislation takes through Congress, international treaties sometimes take significantly longer to create. The Outer Space Treaty was not drafted and ratified until more than six years after Yuri Gagarin became the first man in space. It is very likely that a legal regime establishing clearly settling ownership issues of the mined ore in favor of the US-based company would be unilaterally created before an international treaty was drafted and ratified.

Private endeavors by companies like Bigelow Aerospace, SpaceX, and Planetary Resources, among others are opening the doors to commercial utilization of space ever wider. The need for a recognized system of recognition and enforcement of private property claims in extraterrestrial land, space resources, and goods produced off-planet is ever growing. The United States is in a unique position to unilaterally create such a system that can be enforced from the outset of the first commercial resource gathering expeditions into space. This framework should be established now, when careful consideration and debate can build a fair system, rather than later, when actual operations involving extraterrestrial resources have begun because hastily created laws are often poorly functioning laws.

Happy creating!

5 thoughts on “Property Rights in Space, Part 2 of 2: The Unilateral System

  1. Good morning Andrew,

    While I agree with you that “commercial operations in space will be financially bound to the earth for the foreseeable future” and that the US is currently the largest supplier of goods and services to the commercial space and space launch market; it does not follow from those two statements that “when space is commercially exploited and settled, the United States will still be the largest, richest market for the goods and services produced.”

    After all, suppliers are often far removed from the primary markets for their goods.

    The key here is to remember the cost of transportation to and from Earth orbit, which currently hovers in the $1000 – $15,000 per pound range depending on the supplier and the expected end location/ final orbit (higher and more eccentric orbits are generally more expensive) and whether you’re entering or leaving orbit.

    All of which means that the cost of a typical one pound hammer manufactured on Earth and sent into orbit is the manufacturing cost plus the transportation cost (which in this case is an order of magnitude higher than the manufacturing cost).

    So it’s likely that the primary initial market for manufactured goods and mined materials from beyond Earth is likely going to be other orbital facilities (and not the continental US proper), at least until the transportation costs come down.

    I’d also suggest that, the last time the US attempted to “unilaterally” create a legal framework governing commercial operations in space (the various ITAR regulations, which were developed to address US national security issues), a great many companies moved their primary service providers out of the US.

    Check out “Cutting off its Nose to Spite the Face: Why ITAR is Bad for Business” at http://acuriousguy.blogspot.ca/2012/02/cutting-off-its-nose-to-spite-face.html to learn more.

  2. Hi Chuck!

    Thanks for the comments! Is it your feeling that extraterrestrial platinum-group metal mining will send the bulk of mined ore to orbital manufacturing facilities, rather than the earth itself?
    From reading about Planetary Resources Inc and hearing Eric Anderson speak, my feeling was that their intention is to bring those metals back to earth and perhaps make them as common place as aluminum is now, rather than keeping those minerals scarce on the planet but more plentiful in orbit.
    As to the effectiveness of a unilateral system, I believe a lot is dependent on how a system of incentives and punishments is implemented and the strength of demand for mined ores off planet. If, as you estimate, the initial market is off planet, the US has fewer levers to pull, compared to if the metals are primarily being sold on the planet.

  3. I understand Eric Anderson intends to eventually bring the fancy metals back to Earth and it’s likely he could do so even with current equipment. It certainly would be interesting to run the numbers to see if a Dragon capsule landing with a full load of platinum group metals could make a profit on the round trip costs.

    But I still think that the primary initial market for orbital materials is using them for fuel and life support for space facilities (for this you’d look for ice asteroids) plus for basic materials (from plain old stone and iron asteroids) which could be grounded up and plugged into a 3-D printer to make things like hammers, wrenches and bulkheads. These items are useful in orbit, simple to fabricate with basic facilities, but also pretty expensive to acquire from Earth.

    A “local” supply source would provide immediate cost advantages. I imagine there would also be a secondary market for scavenged parts from no-longer operational satellites which could then be re-used on other orbital facilities.

    I’d even go so far as to suggest that this initial market would need to be developed as part of the infrastructure requirements necessary to build and support the more complex on-orbit facilities needed to effectively mine the resources likely to cover their transportation costs to Earth. It would also bring overall costs down for the larger facilities.

    So, at the very least, this “orbit to orbit” market will develop first.

  4. Pingback: Wednesday / 15 August 2012 | Lunar Enterprise Daily

  5. Chuck, thanks for the clarification! I agree that an orbit-to-orbit-type marketplace will be essential for supporting “more complex on-orbit facilities”. It will be interesting to see when the GDP of an orbit-to-orbit marketplace exceeds the world’s GDP.

Comments are closed.