There were a number of articles shared with me this week about space, and they prompted some high octane speculations that I simply have to share. Two of them come from Mr. S.D., a regular reader here, and one from former Housing and Urban Development Assistant Secretary Catherine Austin Fitts. Here are the articles:
Intriguingly, as the first article observes, there is an asteroid worth more than the entire yearly GDP of the world, and additionally, a system for their ranking and classification in terms of potential wealth, a kind of "Janes' Guide to All the World's Asteroids." Also intriguing is the fact that the first picture of the first article linked above depicts a robotic "mining" lander with with six flags displayed, which appear to be, in addition to the obvious American national flag, the flags of Japan, Australia, Canada, Russia, and interestingly, what appears to be an upside-down Iranian flag. But the real interest here, for our high octane speculation of the day, is the enormous wealth of one asteroid, and the fact that a classification system is in place. It raises the possibility that all that "Bad Paper" we've been hearing about - the derivatives in the trillions and quadrillions of dollars - might had something fundamentally tangible behind them, though most definitely covertly behind them. The problem, as I and others have been maintaining, is that chemical rockets and robots are not, ultimately, going to be adequate to the task of any sustained and commercially viable mining operation over the long term, though they might and probably could be adequate to get the process started.
But the rewards to the process are obvious and self evident. Which brings up, as the second article notes (the one shared, incidentally, by Secretary Fitts), the problem of risk, and risk management. For some time, I've been arguing that the increasing commercialization and corporatization of outer space (not to mention it's increasingly open nature, which, I suspect, began as a very secret matter during the 1950s when a hidden system of finance was erected to fund the development of exotic technologies for space propulsion, requiring the participation of certain prime banks in the scheme, which were enticed with the offer of space itself as the collateral, so to speak) has been erected on an essentially tried and true "Venetian" model, and the second article is something in the way of a bit of corroboration of this hypothesis, for essential to that model - the same model that drove the formation of East India Companies eventually - was the management of risk and hence the development of insurance.
However, there is a problem as the second article avers:
"Such protocols are critical to developing a viable commercial spacecraft industry. Thus far, the FAA has allowed the industry considerable latitude to self-govern, and safety records have not required further intervention. “The fatality rate for climbing Mt. Everest is roughly the same as for people going into space-in fact, it may now be a little worse,” Walter-Range said. “This is an adventurous activity that people choose to undertake, so everyone involved wants to continue moving forward and providing service. The companies have all thought about it and have plans in place for what to do if anything should happen.”
"Insurance companies are still grappling with how to develop coverage for such incidents. Space insurance has long been available for satellites and commercial launches thereof, but it is unclear whether any trips that involve humans will fall within the existing market. The space insurance industry has decades of experience covering the risks of the physical vessels and the launch process. Pricing is established based on the reliability of different vehicles. And, indeed, human spaceflight would likely occur on previously-launched vehicles with a proven record. But live passengers require casualty coverage, and would necessitate collaboration across insurance disciplines. As a result, it could fall out of the sector entirely.
"Aon’s space brokerage has dipped a toe in the spaceflight waters, but Poliseno still sees uncertainty for the market overall. “We have been involved in a number of insurance transactions related to spaceflight participants who have gone up on the Russian vehicles through Space Adventures,” he said. “Most of those are all liability-related, however. It’s a new area for the industry. Groups like Virgin Galactic that are on the precipice of going public and offering their services to the masses will create new challenges.”
"The case of Virgin Galactic encapsulates this dilemma. The parent company already obtains aviation coverage to operate an airline, and currently aims for “space tourism” to take passengers into low-earth orbit, which is only about 60 miles up. Because the aviation market already has experience insuring humans, it may be a more natural fit than seeking insurance in the space market, which has experience covering the technology but has not had to address humans aboard, said Sima Adhya, the head of space for Torus. For a company like SpaceX, however, that plans to venture further from home, it gets far more complex."(Emphasis in the original)
Succinctly put: insurance in space has thus far dealt primarily with the insurance of satellites and so on, and not humans. As indicated, there is some precedent that might lead human insurance for commercial space travel to be developed by extension of aviation insurance. But what will happen in the case of humans involved, not in pleasure travel in space along the Virgin-Atlantic model, but in commercial activity such as mining, where the risks will be correspondingly greater and the human presence more long term? Indeed, no actuarial tables for such activity yet exist, at least, not that we know of, and that brings me to my high octane speculation of the day: what if they do? Much of those tables, if they exist at all, will be based upon the type of technology employed, i.e., chemical rockets, robotic platforms, and, perhaps, human repair crews, vs other off-the-books more exotic technologies. The latter, one may assume, might be considerably less risky from an insurance point of view. And the fact that there already exists tables of classifications of asteroids for their potential mineral wealth is telling, and suggestive.
So the bottom line here is: watch space insurance, for it might afford a clue to what is being developed, or to what might already have been going on.
See you on the flip side...