Explosive Risk: Space and Safety
One area of risk I think is going to get a lot more play in the near future is the impending reiteration of the Space Race. With the rapid expansion of launch capabilities by several countries and by private enterprise, we are moving into an era where new things are possible. The US has the current lead on launch count with 44 in 2020, but China, Russia, and the EU all can launch in volume, and the 114 launch attempts worldwide are the most since the end of the Cold War in 1990.
There are two big changes driving this investment.
The first has been the explosion in private satellite deployment, with 5,700 satellites in orbit and Starlink launching another 100+ a month with approval for 12,000. And with the advent of much smaller, more standardized cubesats, we can launch hundreds of satellites a year with new capabilities in communication and observation. This has created opportunities for private imaging services, many of which will measure risk much more precisely. We can image homes, farms, and businesses in near-real-time. We can see through cloud cover. We can identify pollution sources on site. Our visibility into commercial risk factors will continue to increase.
The second has been sheer launch capacity. Starship, Long March 9, SLS, New Glenn, and Yenisei are all on track to launch 100,000 kg+ to Low Earth Orbit, and today's Falcon, Delta IV, Long March 5B, and Soyuz can all launch at least 20,000 kg at volume. By contrast, the US Space Shuttle could launch 24,000 kg. This capacity will make new business models possible as cost-per-kg drops by orders of magnitude. Space tourism, moviemaking, and reality TV are all in planning stages. Private space stations can be built.
The space market has a number of sources of risk for customers: delayed launches, failure to launch, destruction of the satellite or human cargo, and simple budget overrun and schedule overrun. There are many risks to manage.
Up until this point it has all been bespoke engineering. Space travel is the kind of edge case that is hard for insurers to manage. Traditional launch has been one-time-use.
The US Space Shuttle pioneered the concept of reuse and cost savings, but the move to a partially reusable craft imposed unacceptable complexity/cost ratio tradeoffs given the technology available in the 1980s. NASA development processes were highly disciplined and worked hard to mitigate risk inherent in their edge cases. But these systems are complex. The potential for human error, multiplied by many of parts and interfaces, simply makes risk inherent. Errors creep in, sometimes embarrassing ones, such as the 1999 destruction of the Mars Climate Orbiter over a failure to convert one figure between metric vs. Imperial units, or the loss of surface probe data in Russia's Venera probe mission to Venus because an ejected camera lens cap got in the way.
Enter SpaceX, funded on a relative shoestring by Elon Musk in 2001 with some of his eBay proceeds. Bringing agile development processes from software development into space hardware development was their approach. The many risks of space launch failure would be mitigated by reducing costs by factors of 10 or 100.
SpaceX has taken unconventional approaches. Their Starship development program was started as a garage-built prototype, with welders hired from water tower builders. But they iterate at speed and massively. The program as of this writing is on its 9th Starship prototype. SN8 launched a 12km test flight that validated much of the design but lost pressure on landing and ended badly. No matter, when SN9 was ready to launch a month later (even after falling off its assembly pad) and SN10 through SN15 are in the assembly line... and can all be informed by the data from the previous prototypes.
Meanwhile, the NASA/Boeing-led Space Launch System consortium has taken a more traditional approach, but has yet to launch after nine years and $18B.
The iterative approach has other benefits. SpaceX's first commercial launch platform Falcon 9 proved out low-cost rapid reuse, and other startup launch firms such as RocketLab and other countries including China and Russia are pursuing reuse as well. Reuse of launch equipment was originally seen as highly risky, with the US military declining to use early versions. The safety record of SpaceX has been quite good, however, with F9 launch success rates near 100%.
Reuse is now being touted as a "flight-proven" benefit. Proven reliability can trump precise design and engineering. The US Air Force has now approved reuse where there is no conflict with individual missions (reuse does cost some fuel and therefore limits range). And NASA certified the SpaceX human transport Crew Dragon system in part because the system had demonstrated mission success through multiple cargo runs to the International Space Station, thus testing and validating the design through iteration.
And with volume comes the possibility for financial risk offset. Insurance will be a key driver as this market matures, both to manage the risk of launch and as a customer of these services. SpaceX President Gwynne Shotwell cites insurance as a driver of market maturation, giving launch customers the means to offset what has become manageable launch risk. As space becomes less a one-off chancy adventure to a more know commodity, the market will only accelerate.
The big takeaway: iteration and cost reduction can dramatically reduce overall risk. Keeping your bets "small and fast" tends to help manage risk over the long haul... even as far as Mars.