*date: july 11 2023* --- I recently attended [Unplug Climate](https://unplug.vc/), a 3-day climate tech hike/retreat. After a lovely day hiking back to our hotel and an afternoon whitewater rafting, I sat at the hotel's bar to have a drink and started a conversation with another Unplug attendee called [Fred](https://twitter.com/freddy33). As the usual introductions ensued, Fred explained he is an investor in space technology. I was curious. What kind of returns does one expect as an investor in that industry? and is the timeline aligned with 'normal' VC timelines that are about 10 years long? Fred explained that there are multiple 'levels' an investor in space tech would consider as they invest in a space tech business. Level 0 -- scoring defense contracts, to the tune of hundreds of millions to billions of dollars. - your customers at that point are governments (defense, space agency etc). there aren't a lot of them and they can make or break companies (see how NASA saved SpaceX) - this reminded me of the early computing era, with the military often being the first customer for technology that was initially too expensive for wider use. Level 1 -- commercializing low-orbit use-cases, like [Starlink](https://www.starlink.com/), [Varda](https://varda.com/) or [Planet Lab](https://www.planet.com/). - your customers at that point are companies and individuals. the universe of customers is now bigger, and the applications of the technology reaches commercial use-cases. - [Planet Lab](https://www.planet.com/) is particularly interesting. They developed very accurate satellite imagery which they then sold to hedge funds who had access to non-public information about company performances and were able to trade on it. - Varda is also fascinating! They're trying to build the first commercial zero-gravity industrial park for manufacturing products in space to benefit Earth, and they're starting with drug manufacturing in space. Level 2 -- lunar resources exploitation. - once we can get out of the earth's gravity easily and cheaply enough, we can start thinking about building the lunar industry. - Fred detailed two main ways this could be linked to earth's industry 1) building stuff on the moon that would then be sent back to earth's orbit. 2) building stuff on the moon that's sent to earth (which is more expensive than the above). - Fred explained that there are things we can build in outer spaces for a lot cheaper than on earth. Level 2 was particularly striking to me. I wanted to learn more. What type of resources does the moon have that we wouldn't be able to get on earth? what are the challenges involved in leveraging it? what's the timeline we're looking at? As the conversation continued, we somehow arrived at talking about the fact the moon's soil (called regolith) is rich in Helium-3 (He3). I knew [from some background reading](https://www.helionenergy.com/faq/) that He3 is particularly useful for fusion-based nuclear energy, and that it's rare to find on earth. A quick Google search taught us that 100 kilogram of He3 is [worth $140m](https://www.lpi.usra.edu/decadal/leag/DecadalHelium3.pdf). So I obviously started asking whether the economics would work today to send a lil space excavator on the moon to dig out He3 and send it back to earth. At that point, someone overhearing the conversation from the other side of the bar joined us. It was [Jerome](https://www.linkedin.com/in/hjunidad), ex-researcher at Xerox PARC and another attendee of Unplug, now building a company producing green fertilizers (currently representing 2% of global Co2 emissions!). Fred, Jerome and I started doing the math: - according to Fred, the cost to send a kilogram of gear to the moon today is about $1m. - Fred noted that the cost with Space'x Starship will soon be $2k per kg, and Starship seems to be ready on a relatively short timeline. - // This is a significant reduction in cost (orders of magnitude) and might have a serious impact on the economic viability of this opportunity! - you would need to send enough machinery to the moon in order to extract the Helium-3 from lunar soil, pack it, then send it back to earth to be used. - how many kilos would that be? and what machinery was needed? was not clear. - the machine would need to be able to work with minimal resources as it will be operating in lunar condition. Fred suggested it could use solar energy to power itself since the solar rays & radiations are so powerful on the moon. - // the idea that the machine may have to land on the moon and then build more of its parts with materials there reminded of Von Neumann probes and self-replicating automatas, a fascinating topic that i learnt about in [[the man from the future, the visionary life of john von neumann by ananyo bhattacharya (book notes)]]. Jerome started thinking through the problem of capturing Helium-3 from the soil, and suggested we could re-use [direct air capture](https://www.iea.org/reports/direct-air-capture) techniques, usually used for carbon capture. He looked up the composition of lunar soil and realized He3 is a tiny fraction of the soil (only 12 ppb!), making things difficult since direct air capture technique extract CO2 from air that has about ~400ppm in it, a difference of multiple orders of magnitude (parts per billion vs parts per million). While we couldn't get to exact figures in our napkin math, the thought exercise clarified the problem space in front of us. In order to make this work: - we would need to conceive of a new method to extract He3 at this fine of a precision - we would need to build a machine, likely using solar power, that can be shipped to the moon economically and achieve the desired task - we'd need to figure out market dynamics of doing this (the price of He3 wouldn't stay static if the supply increases!). that being said, assuming fusion becomes more common place, He3 will be more in demand! In a second step, should the idea work, lunar He3 exploitation could potentially bootstrap the exploitation of other lunar resources (where lunar He3 exploitation infrastructure could be re-used for other rare chemical elements). We concluded there is probably an FRO (Focused Research Organization) to build around this, by listing out all the open problems to solve in order to get this to work, and by bringing a few talented people together to figure this out. Fred suggested he'd be happy to list out all the open problems he sees. Jerome mentioned the problems don't feel particularly insurmountable! The hour passed quickly. We then went on to dinner, where we talked a bit more about the space industry before switching to other topics. Looking back at the conversation now a few weeks later, it was refreshing to hear 'exploitation of resources' mentioned in a positive light. I imagine 50-60 years ago, humans talked about earth's resources that way. With climate change, a lot of discussions have shifted towards ['degrowth'](https://www.weforum.org/agenda/2022/06/what-is-degrowth-economics-climate-change/) which i find a little depressing, and lacking faith in our ability to innovate as humanity. As I was listening & participating in this conversation, feeling the shift in my own mindset when thinking about resources available to us, I wondered if the space frontier is how [the Great Stagnation](https://en.wikipedia.org/wiki/The_Great_Stagnation) ends. Space tech and building the lunar industry is fascinating. [Fred ](https://twitter.com/freddy33) got me hooked and I look forward to learning more about it. Thank you Fred! --- sidenote -- as i was writing this, i found a few related links that look interesting. - Fred created an explainer video a few months ago on the new frontiers in space exploration, I recommend you to watch it for more color on what was written about above. https://youtu.be/S_ngqlgey2A - https://www.polytechnique-insights.com/en/braincamps/space/extraterrestrial-mining/helium-3-from-the-lunar-surface-for-nuclear-fusion/ - https://www.nasa.gov/feature/nasa-successfully-extracts-oxygen-from-lunar-soil-simulant