Realtors in Space!
Practical considerations will create a real estate market in Space sooner than we think
Space in our local neighborhood is filling up fast and this will create an on-orbit services economy to manage it
Some memories stick with you. Over twenty years ago, I had my first real coat & tie interview, which included a written test. The first few questions were a series of brain teasers (which I probably did horrible on) followed by a series of essay questions.
The last essay question sticks out in my mind: “In the fictional world of Star Trek, what doesn’t make any sense?”
My short answer was “there is no money.” This led to a long discussion with the interviewer (Peter Thiel) who first asserted that “well, conceivably they can make anything they want with a replicator. Why would they need money if demand is zero?”
My rebuttal was: “mass, energy and space are always conserved. I can’t make more land or space with a replicator. Wherever there is scarcity it is most efficiently addressed through price allocation.” Peter was intrigued by my answer, but unfortunately (or fortunately depending on my point of view), I didn’t get the job.
“Buy land. They aren’t making any more of it.” - Mark Twain
This memory brings me back to something I’ve been seeing take shape today in the Space industry. We were always told that Space was infinite, but at least when it comes to our immediate neighborhood of the earth out to the moon, that’s increasingly becoming not the case. Space is getting really crowded, really fast. Barely ten years ago, there were only 1200 active satellites on orbit. As of April 7th, 2024 its 9428 active satellites and 9728 tracked satellites (including graveyard orbits) according to orbit.ing-now.com; in ten years it will likely be 17000 active satellites and perhaps 10-20x as many if mega-constellation plans from Kuiper, eSpace and others play out. With each passing year, space gets more and more crowded and it’s only a matter of time before it becomes a problem.
We have the makings of a classic tragedy of the commons problem from undergraduate economics because we are not allocating a free resource effectively. This will only be compounded by higher launch cadences, more mega constellations and the creation of an on-orbit economy for the benefit of people on earth (like the re-entry capsules Varda demonstrated for returning pharmaceuticals manufactured on-orbit) which have to be de-orbited in a controlled and precisely choreographed way on a frequent basis.
Worse yet, in the absence of a pricing mechanism or some other means to efficiently allocate orbit “slots” we are left with our political organizations like the FAA, the ITU, or god forbid the EU, clumsily doing so (like shutting down SpaceX’s application for a VLEO constellation to allow cell phone service from space) or putting in place reactionary regulations that make no sense and stifle innovation.
So how does this lead to Realtors in Space (not to be confused with Mel Brook’s Jews in Space)? Well, any time that a seemingly infinite resource becomes finite, people make claims on it. This then becomes an opportunity for service providers to manage the transfer of property amongst them and help with the care and feeding of that market once it takes shape. In this piece, I’m going to take a little bit of time to talk about the challenges and opportunities afforded by our increasingly crowded skies: orbital traffic control, orbital logistics and orbital real estate. I’ll talk about the need for efficient market clearing entities to emerge or else we may end up with something that looks more like water rights in California than an efficient real estate market like we have in some parts of the country.
A quick primer on Orbital Mechanics
Just a quick refresh for those of us that don’t live and breath in this space (feel free to skip ahead to the next section if you do). Since this isn’t an orbital mechanics class I’m going to intentionally oversimplify and not talk about things like perigee (point of closest approach), apogee (point of furthest approach), eccentricity (a measure of how non-circular/elliptical an orbit is) or other parameters. To zero-eth order, the two most important parameters when it comes to defining a satellite’s orbit are its altitude and inclination. Satellites that fly close to the earth have what’s called a Low Earth Orbit (LEO). Most remote sensing satellites and newer communications satellites fly in these altitudes and may orbit the earth a dozen or more times a day.
Satellites orbiting below 500 km typically are referred to as having very low earth orbits (VLEO) and this includes virtually all manned space flight due to radiation concerns from the Van Allen belts. The international space station (ISS) typically orbits between 300-400 km altitude for reference. VLEO orbits are subject to orbital drag from residual gas (known as atomic oxygen and nitrogen) in the upper ionosphere and other perturbations. There is also a high density of transitory debris at this altitude as launch vehicles kick off debris as they shed stages and satellites break up during de-orbit (we’ll touch again on VLEO later on).
Satellites at higher altitudes, known as medium earth orbit (MEO), include constellations like GPS, Galileo (the European equivalent) and GLONASS (the Russian equivalent), as well as a set of highly inclined remote sensing and communication satellites that service higher altitudes through a set of orbits called Molniya orbits.
Finally we have higher earth orbits (HEO), which includes the most commonly used orbits known as Geosynchronous orbit (GEO) which orbits about 36,000 km above the earth. A GEO orbit has the advantage of orbiting the earth once a day so it stays about the same point at all times. There is also another category of highly inclined 24-hour orbits, known as Tundra orbits, which are also becoming somewhat popular among the satcom crowd looking to service higher latitudes with fewer satellites. Another quick point to mention is that when GEO satellites are retired its too hard to de-orbit them so they are simply moved into what’s called Graveyard orbit a few hundred km above GEO and then have their batteries discharged (the satellite is passivated) so they are just space junk.
Inclinations are pretty intuitive to understand as well: GEO satellites typically exist in what’s called equatorial or near equatorial orbits close to the equator to minimize perturbation and the need to repoint the satellite as it wobbles around the earth. Remote sensing satellites, which tend to occupy much lower orbits, generally favor more polar orbits, where they will pass over every point on earth (up to the maximum orbital inclination in latitude) at some point in a series of orbits with constellation revisit requirements typically driving them. One notable and especially popular orbit is nearly polar and known as a Sun Synchronous Orbit (SSO) where the satellite passes over the same point at the same mean solar time every day (useful for missions like weather monitoring).
When groups of satellites (known as constellations) are designed, a high degree of attention is given to their revisit rate (number of times per day they have line-of-sight to the same point), percentage coverage of the earth and other factors. The most common family of constellations, known as a Walker constellation (as shown in Figure 5), will put satellites in multiple different inclinations and depending on the desired altitude, will put multiple satellites in the same orbit in different positions to provide continuous (or near continuous) whole earth coverage. This “orbital slot” parameter is known as the true anomaly (which inspired the company of the same name) and is important because it’s perhaps the easiest parameter to change, along with altitude for an orbiting satellite.
Wrapping up this discussion, it’s important to understand that while we like to think that satellites will stay in the same orbit forever, they really don’t. To maintain a certain position over time, they require a certain amount of station keeping force, usually measured in a parameter called delta-V, to correct for gravitational anomalies, drag and other forces that may perturb their orbit. In low earth orbits in particular these can be quite pronounced and low earth orbit satellites must launch with a non-trivial percentage of their weight as propellant that they will need to use to stay on course, as well as to change orbit, de-orbit etc.
Collisions and the Need to Mitigate Risk
Setting aside the threat of space warfare in the form of anti-satellite (ASAT) missiles and kamikaze satellites (perhaps the subject of a future post), At least six satellites in the last 30 years have been destroyed by collisions with other satellites and debris, resulting in 10s of millions of dollars in damage and further adding to the debris cloud on orbit, risking further destructive events. When a collision occurs the massive kinetic energy released pulverizes the two objects and create thousands of pieces of debris that over time spread out to fill the entire orbit, with the potential for any debris larger than a grain of sand potentially doing damage to another satellite. While after 25 years or so all the orbit may clear, meanwhile its a huge mess that puts other assets in similar orbits at risk. Spacecraft like the ISS are often designed with complex shielding to protect them from micrometeoroids and debris 1 cm or less in diameter, but smaller satellites usually lack such protections.
A study conducted by Aerospace Corporation in 2017…predicted a tenfold or more increase in annual collisions, perhaps to a rate as high as one a year. It also predicted that mega-constellations may make the the number of close-approach alarms adjudicated each day go as high as 25,000 warnings a day.
Through robust tracking from the ground using Space Object Surveillance and Identification (SOSI) radars for tracking such as the Space Fence or more recent entrants such as LeoLabs, we have been able to precisely catalog most objects on orbit larger than 20 cm or more. This has allowed numerous potential collisions to be avoided through collision avoidance maneuvers. But with each passing day as more satellites appear on orbit, these maneuvers are becoming more and more frequent and an unintended collision becomes more and more of a risk.
According to a study conducted by Aerospace Corporation in 2017, we may well be past the breaking point already and it’s possible we are already on borrowed time. The study predicted a tenfold or more increase in annual collisions, perhaps to a rate as high as one a year. It also predicted that mega-constellations may make the the number of close-approach alarms adjudicated each day go as high as 25,000 warnings a day, which seems impossible to adjudicate.
So what happens if we start getting too many collisions a year? Well, we create a positive feedback loop of collisions famously known as the Kessler Syndrome, the cataclysmic event in the Hollywood blockbuster Gravity. This could basically wipe out entire orbits as smaller objects collide with larger objects and cause them to disintegrate, filling the orbital plane with even more debris- potentially rendering entire altitudes unusable for years.
How close is too close
Even on station on geosynchronous orbit, far from atmospheric drag, satellites drift in their orbit due to uneven gravitational forces from the moon and the earth, solar radiation pressure and other perturbations require orbital station keeping to maintain precise position over time. Inertia is a constant phenomena in an environment with almost zero drag and drift over time is inevitable without careful maintenance. So-called station-keeping maneuvers must be accounted for in any satellite propulsion budget.
Historically, the orbit with the most contention has been GEO. This was primarily driven by the spacing needed between communications satellites to avoid interference from operating on similar frequencies. The International Telecommunications Union (ITU- a specialized division of the UN) has been principally responsible as the custodian of orbital “slots” which are typically at least 75 km apart (~.25 degree in angle) with most enforcement driven by licensing from entities such as the FCC. Basically, if the ITU didn’t approve of your slot, you wouldn’t get your frequency allocation from FCC, so you couldn’t operate.
There were some small but notable exceptions to this rule: in the 70s ITU began allowing operators to stack comm satellites from similar providers that were frequency coordinated and control coordinated in the same orbital slot. This was done to expand coverage (e.g. add more TV channels), as well as to ensure coverage (having a backup ready for an aging satellite). Essentially, multiple satellites could operate in the same 140 high by 140 wide by 70 km deep wedge as long as efforts were made to keep them at least 5 km apart from each other. This ballet was not without dangers, with simulation results showing that at least one approach within 50 m or less was possible every year for 8 satellites. This doesn’t seem very close until you realize that the solar wings on a large GEO satellite can be as wide as a 737 jetliner (~117 ft).
This precedent of co-location actually bodes very well for operators like Astranis which would love to replace a single Terabit throughput Viasat Geo SatCom bird with 20 of their Omega microGeo birds someday - though it does create a need for orbital logistics (to help with station keeping) and servicing in the event of a failure (last thing you want is a malfunctioning satellite maneuvering wildly in a tight wedge).
For LEO orbits, minimal controls have existed, with most activities relegated to the spectral domain to limit interference between users on similar frequencies. More focus has been on creating similar “keep-out zones” to what exists in GEO in the form of spherical zones around assets (an approach that seems completely ignorant of orbital mechanics). The Iridium and Kosmos satellites that collided in 2009 actually did so at right angles to each other (orthogonal orbits) so such approaches simply don’t work in these lower orbital planes. Mostly the enforcement has come in the form of clumsy spectrum license denials, like the SpaceX denial for VLEO mentioned earlier.
There is an amazing precedent for the private sector and not government managing property rights in a domain: it’s called ICANN and it’s how we manage internet domains. When you look at how well the internet is managed compared to, say, the California real estate market, you see that government isn’t necessary except for perhaps a role in adjudication and enforcement.
The Aerospace corporation report above suggests it may be time for a more formal orbital licensing regime to come into play. Rather than having this become the purview of UN bureaucrats (please God, no) who will give us such buffoonery as spherical keep out zones the private sector can help solve this problem? Perhaps a cooperative effort by insurers and larger private operators who may ultimately foot the bill in the event of a failure can solve it. Maybe this is an opportunity for the Slingshot Aerospace’s or Morpheus Space’s of the world to branch out and work to allocate orbits during the mission design phase in popular planes of use in conjunction with insurers like SwissRe, AIG, SpaceCo and others who insure these missions? This may create the space equivalent of planning, deeds and title insurance.
There is an amazing precedent for the private sector and not government managing property rights in a domain: it’s called ICANN and it’s how we manage internet domains. When you look at how well the internet is managed compared to, say, the California real estate market, you see that you government isn’t mandatory except for perhaps a role in adjudication and enforcement.
Space Services Economy
The idea and practice of servicing satellites on-orbit is nothing new: astronauts serviced the Hubble Space Telescope five times over the course of the Shuttle program, twice recovered failed satellites from orbit on behalf of Lloyd’s of London and retrofitted Intelsat 603 with a new booster in the 90s so it could get in its proper orbit. What is particularly new is the practice of robots doing this, not astronauts.
In 2020, SpaceLogistics, a Northrop subsidiary, launched a satellite known as Mission Extension Vehicle-1 (MEV-1) which mated with IS-901 in GEO to help extend its life. Since then, others have entered the space service and logistics business, including Starfish which launched its Otter spacecraft last year. Also coming in with a larger more ambitious project aimed at Geo missions, Atomos space launched its Gluon and Quark mission last year as well. Combined with the 43 or so other players in the Orbital Transfer Vehicle space that I’ve discussed in a previous article it’s clear that Space Logistics and Service will be a burgeoning area of activity and investment for years to come.
Do if we continue to pull on this thread a little further: what other services for the space economy can we imagine the increased density producing?
Space Debris Management/Disposal Services/Recycling?
A potential need that seems obvious from all this discussion is a mechanism to dispose of on-orbit debris. There have been several experimental missions in this respect, with RemoveDebris, from the University of Surrey which showed such solutions as a Harpoon (for sticking interesting debris) and a Dragnet/sail (designed to increase drag to accelerate deorbiting). ESA and UKSA also have a mission called Clearspace-1 planned which will demonstrate the ability to capture and de-orbit dead satellites. While individually interesting, the idea of launching another satellite to kinetically attach and de-orbit large objects seems like a very non-scalable solution, perhaps limited to the most hazardous targets only.
One other prospective solution to clearing space debris of all sizes big and small from the ground is the Laser broom. This involves firing a laser from either the ground or a station to slow down debris through applying light pressure. It also has the advantage of not requiring you to launch more objects on orbit to solve the problem and being retargetable. This would likely require a “Cardinal of the Kremlin” sized laser with a mirror 13m in diameter 81 kw average optical power as outlined in this 2011 paper from LLNL and Sandia (note: I worked with a few of the authors of this paper when they were at Raytheon and I trust their math). You can learn more in the video below.
A potential business idea that falls out of all of this would be if there is an economical way to capture and recycle old satellites? There is precedent for this in Maritime salvage law and it’s likely that with robust space manufacturing on orbit- this is a prospective resource that could be harvested virtually for free (just the cost of fuel) and the materials used for other projects.
Lawyers, insurance agents and realtors
There is already precedent for a legal process for the adjudication of damages caused from incidents in space and on earth from falling debris, which I briefly touch on in a previous article under the Outer Space Treaty. There has also been a robust insurance market since the early days of the space age to cover the potential losses of launch failures and satellites failing before becoming fully operational on orbit. However, over time as space gets more crowded, damages due to negligence or intentional damages become more frequent and there is a need to secure property rights, it is likely that these service industries will become more complicated. It’s possible we may also see some equivalent to the Convention on the International Regulations for Preventing Collisions at Sea or COLREGS (which govern travel on the oceans) emerge which would also require enforcement through fines, penalties and adjudication.
The need to secure property rights and the need to access a scarce set of orbits will inevitably lead to a market for buying/trading orbits for commercial use and yes, realtors in space (ok fine, not really realtors but “orbital real estate brokers”). One could also see government entities exercising the equivalent of eminent domain to claim orbits and space around their own assets where required.
Since it’s also possible that people will only need an orbital slot for a set period of time, in which case orbital leases or even a futures market (since you may not need orbital rights for a few years) could emerge. Another potential headache: what to do about transfer orbits post launch and transit lanes for spacecraft that need to re-enter to a set location? If someone passed through your orbital slot without permission, would they be trespassing? All interesting questions we will need to answer in the future.
Can we make more orbital real estate? The skyscraper analogy
So while the Mark Twain quote in the beginning of this piece may have a corollary in that “we can’t make more space in low earth orbit”, Mark Twain didn’t live far enough into the 20th century to see technology contradict him with the invention of the skyscraper and the introduction of underground construction (think parking garages). People paid top dollar to live and work higher and higher into the sky (and still do) or park their cars deep underneath, seemingly creating more land out of thin air.
Similarly, it is possible to create new “orbital real estate” by going lower in altitude into so called very low or VLEO orbits to do the same mission. These are generally defined as orbits below 450 km, to perhaps as low as 90 km like the DARPA OTTER program aims to go (note: 100 km is the Karman line generally considered the boundary between air and space).
In addition to being less crowded than LEO orbits, VLEO has the additional advantage of a shorter slant range to systems on the ground and in the air: reducing latency, increasing resolution of sensors and allowing smaller antennas to do the same job. While manned spacecraft have been operating here for virtually all of the space age (with the exception of the Apollo program), the high drag from the rarefied atmosphere has made this particularly frustrating for smallsat operators with limited mass and volume for large station keeping fuel tanks, greatly limiting lifespans. Several mission companies including Albedo and Lumen Orbit have been funded in the last year or so to try and exploit this regime as well.
Several solutions have been proposed to enable this. The first proposed by Red Wire with their Sabresat concept and an Aerospace Corporation project called Disksat is to simply minimize the drag of the satellite by making it more aerodynamic.
Complimentary to this is a concept known as air breathing propulsion. This is where we collect atomic oxygen and nitrogen from the ionosphere that is present in trace amounts in VLEO, store it and use electric propulsion (typically known as Hall thrusters or ion propulsion- made by players such as Phase Four or Busek) to shoot it out the back of the vehicle with substantially greater velocity than it was captured with to overcome the drag force it creates through impact with the space vehicle. DARPA, Air Force and ESA are all investing heavily in this approach, which enables infinite flight times at VLEO altitudes. The most dominant player in this new field is Veridian Space (Disclosure: I’m an advisor to Veridian), a Village Global backed start up based in El Segundo that is a subcontractor for several programs in this domain with their Air Scoop Electric Thruster (ASET) technology. A couple other European companies also have emerged including NewOrbit Space and Kreios Space, but given the DARPA and Air Force interest in VLEO funding that will have to go to US companies here and access to the Gundo talent pool, my money is on Veridian.
Wrapping up
In the future, will certain orbits become so valuable that wars could be fought over them like island chains in the South China Sea? Time will tell but it’s not a stretch of the imagination when you consider the density of satellites that is emerging in certain orbits. Its easy to see certain orbits like Sun Synchronous Orbits becoming extremely valuable as the demand for remote sensing assets increases. Also it’s possible certain orbits may be more favorable to return of goods from on-orbit manufacturing in the future.
Anytime there is scarcity, it must be handled through either market or political allocation. Space is getting crowded enough that the scarcity is becoming obvious as the hazard of collisions with space flotsam and jetsam. Private industry can take steps to mitigate this by working cooperatively to create a market for orbit licensing using the precedent of organizations like ICANN.
In the absence of a market allocating resources, we leave open the default of political allocation, which may be at the hands of EU bureaucrats in Brussels or worse, hostile entities of both state and the non-state variety laying claim and squatting on orbits like a past due tenant in LA County during Covid. It’s likely some form of “orbital coast guard” will be necessary for enforcement at some point that doesn’t come with the full Title 10 considerations of the Space Force or other government bodies. Either way, this starts to look a lot more interesting and we can see the emergence of a much more colorful set of service industries emerging to manage and support what will become a finite resource, including space realtors.