By Grant Haas, NSS Legal Fellow
Is commercial space travel just for the wealthy? Aren’t private equity firms jumping at the chance to invest in the first mainstream commercial space travel venue? There’s good news!
Commercial space travel is not just for the wealthy. Rather, the more prevalent the commercial space travel industry becomes, the lower the market prices for these services. However, the unfortunate news is that private equity firms are simply not yet willing to advance this industry. These firms have deemed the commercial space industry to be immature and therefore too risky for large investments. How then, can the nascent industry find the funding it needs?
Enter the proposal for an Outer Space Private Investment Corporation (OSPIC). The National Space Society (NSS) recommends in a Position Paper that Congress establish OSPIC to focus on supporting the development of commercial space infrastructure in order to enable what is projected to become a $2.7 trillion dollar industry by 2045. NSS argues that the U.S. government can be more tolerant than private firms in evaluating the risk factors of its investments.
The OSPIC proposal states that it would follow an existing government program called the Overseas Private Investment Corporation (OPIC). OPIC’s model provides the financial structure to create: (1) an independent entity to coordinate and manage larger scale financial support; (2) a more politically acceptable government funding mechanism that does not seek to pick winners and losers, compete with private capital, or engage in industrial policy benefitting a single industry (space is no longer about one industry but is becoming a new region of economic development for all industries); and (3) a more financially sustainable organization through financing fees and investment gains with the potential to pay back taxpayers over time. Although jumpstarted with taxpayer funds, over time OPIC has returned money to the U.S. Treasury. The NSS Position Paper contends that if OSPIC is established and correctly funded, it can provide the following benefits, among many more: financial risk sharing for private investors, increased economic growth for the U.S. pubic and taxpayers, more capabilities to support missions for NASA, and maintaining innovation and a technical edge for national security.
Should the creation of OSPIC be presented to Congress? Or, is this simply a pipe dream, a risky investment, and a waste of government time?
Read the full NSS Position Paper on Outer Space Private Investment Corporation (OSPIC).
About NSS Legal Fellow Grant Haas
Grant Haas grew up in Titusville, Florida where he enjoyed the wonders of the space coast and a part-time job as a photographer at Kennedy Space Center Visitor Complex – stationed in front of the retired Shuttle Atlantis. He earned his undergraduate degree from the University of Central Florida in Finance. While at UCF, Grant was a member of the Club Baseball team and finished as the NCBA National Championship runner-up in 2017.
Grant is a third-year law student at Florida State University College of Law. He is on FSU Law Review’s Executive Board as a Notes and Comments Editor, FSU Law Moot Court Team’s Executive Board as a Treasurer, a staff editor on FSU Law’s Business Review, and Vice President of UKnight. Grant is also one of Professor Powell’s teaching assistants for Legal Writing and Research, a class required for first-year law students. He competed in the Manfred Lachs Space Law Moot Court Competition in 2020. He also competes on the FSU Law Softball team and won the annual University of Virginia Law School Softball Tournament in 2019.
In his spare time, Grant enjoys playing and watching sports, listening to sports and business podcasts, and keeping up with the development of the space program near his hometown. In addition, he volunteers his time as a youth group leader for high school students and as an IRS certified income tax preparer for low income residents of the Tallahassee area.
Hey Grant, thanks for the introduction to the position paper.
There must be a way we can talk about exploration without being tone deaf. (See “Whitey on the Moon,” George Floyd, BLM, COVID, etc.). There must be a way we can address the practicality of what NSS is asking Congress to do so exploration seems less like a luxury and more like a worthwhile pursuit. Practically, the country is on fire and we’re in a pandemic, so why would congress have a conversation about putting money into space exploration? I have a hard time taking myself seriously talking about space before addressing this. I don’t think addressing this impossible though, and I’m sure your cohort would be doing many space students and experts a favor by discussing that conflict.
Relatedly, there’s a commercial market on its way, but we haven’t made clear how it’ll be valuable to the average American, or how such people will participate in that market.
To a degree, the industry is dominated by wealthy, white, ivy educated men who are venture capitalists. (Crunchbase has that info). OSPIC would potentially divert taxpayer money toward these already-wealthy people. Long-term, I’m optimistic we’d get a good return on investment, but it’s not a politically appealing exchange.
Congratulations on your blog, Grant!
I would like to take this opportunity to also partially respond to Nathan’s comment above. Nathan I take your point about not being tone deaf while promoting space development. It is particularly important for us in NSS because we believe that space development should be carried out to benefit everyone in every part of society and the OSPIC idea has that goal in mind. Keep in mind that the OPIC model is based on is for improvements in emerging economies. In other words, the target populations are not affluent societies. Also, if you look over our more recent policy papers on https://space.nss.org/national-space-society-position-papers/, you will find papers with titles like, “Space Solar Power: Enabling a Green Future with Economic Growth” and “How Space Technology Benefits the Earth.” We are hardly promoting “luxury” — far from it! Yes, current social upheavals cry out for out attention, but we choose to eschew the trap of partisan politics and concentrate on a vision that can bring a better life for people all around.