Disclaimer – This is a short section from my upcoming book. It is NOT an in-depth analysis or business plan. The point of this section is to show that isn’t financially impossible. Please don’t email me complaining about the lack of details or any other stuff. Save it for when I actually start getting into the economics of Lunar Homesteading.
But space is so expensive! I hear you. The way we’ve been doing it has made it really expensive. I’m sure Lunar Homesteading will be able to bring the cost down significantly. Especially once there is a number of Homesteads creating the cis-Lunar economy.
This post will briefly cover how we can fund the creation of Homesteads and some ideas on how they can repay those funds and become profitable. I’m not going to go into a lot of depth here as there’s going to be a whole book on that topic (Book 13 of this series).
Why is Economics almost the last book in the series when it is such a critical component? Two reasons actually. First, I want to get a firm understanding of all the components that make up a Homestead before I try to figure out how to pay for it. Second, I don’t particularly like Economics (and financial stuff in general) and would rather get all the science (the fun stuff!) done before tackling it.
Figuring out the financial aspect of Lunar settlements is hard. So hard that we have spent decades working on it and we still can’t get the numbers to line up.
How can Homesteaders fund their adventure?
How do we make settlements pay for themselves? This is the question that has been plaguing us for decades. It’s why we don’t have settlements now. Well, that and we don’t have the tech for sustainable settlements. There are a lot of ideas on how Lunar bases, outposts, and settlements can get the money to get started; none have worked so far. Perhaps it’s time for something different?
Here’s one idea for financing Lunar Homesteads.
- A group of people form a company whose sole mission is to establish their Lunar Homestead. They are going to need a solid business plan on how to repay all the funding they get over a reasonable period of time.
- This company now goes out, with its plan, and secures funding. Funding sources include self-funding, long-term loans, angel investors (individuals with lots of money), investment companies, and crowdfunding.
- The company uses the funding to buy Lunar Homesteading kits, training, supplies, and transportation.
- The Homestead is established, starts producing revenue, and pays down its financial obligations.
- At some point the debt is clear and the company is disbanded. The Homesteaders are now free to decide how they want to organize and govern themselves.
I don’t know. This really isn’t my thing and I haven’t spent much time looking into it. You may recall from the previous section that many settlements were founded by private individuals who raised funds to finance expeditions. Seems like we should be able to do that again. Large amounts of money don’t see to be in short supply these days. Heck, a Homesteading group might just need to find one wealthy backer.
How can Homesteads make a profit?
OK, we’ve got funding and have built a viable Lunar Homestead. Now we have to pay the money back. How is our Homestead going to do that? Here are a few ideas.
Mining and refining
These are always popular. Extract oxygen for rockets. Iron and aluminum for building things. Homesteads are constantly mining and refining Lunar resources for their own needs so why not sell the extra? There are two problems with this.
First, the only known Lunar resource that might be profitably sold on Earth is Helium-3. And that’s if we can ever figure out how to use in sustained fusion. Earth industries just don’t have a need for raw Lunar oxygen, iron, aluminum, titanium, etc.
Second, a cis-Lunar economy has to reach a certain size and complexity before it’s more profitable to buy Lunar resources than have them shipped up from Earth. The exception could be rocket fuel and oxidizer. It really depends on how the transportation system is set up. Later Homesteads will definitely find local (Lunar and orbital) markets for their raw materials but the early Homesteads will struggle.
Vehicle servicing and refueling
Lunar produced rocket propellent is the current flavor of the month. Lots of people are working on getting at that sweet, sweet Lunar ice so they can convert it into liquid hydrogen and oxygen to be burned in rockets. And make some money in the process.
This seems short-sighted and irresponsible to me. Lunar hydrogen is a limited resource and should only be used in processes where it’s not lost. Future settlers are going to judge us harshly for wasting a critical resource. And it’s not like we have to use LH/LOX rockets. There are rocket designs that use liquid oxygen and powdered metal; things Luna has plenty of. All we have to do is invest some time and money developing them.
Anyway, Homesteads could sell oxygen and powdered metal for rockets throughout cis-Lunar space. They could provide protected space and skilled technicians to maintain landers and satellites (easier than doing it in orbit).
It might be next to impossible for early Homesteads to sell their raw resources but goods manufactured from those resources are another matter. However, anything manufactured in space is something that doesn’t have to be launched from Earth. That gives it potentially significant value.
Much of this again depends on how mature the cis-Lunar economy is. During the early years Homesteads could focus on creating excess low-tech Homestead kit components (pressure hull and SPORE components, for example) to be sold to new Homesteaders. Later on, they could build components for Orbital Homesteads, Solar Power Satellites, and all kinds of things. Heck, Luna could become the shipyard of the Solar system.
There may be a very small specialty market on Earth for Lunar veggies. People spend money on some very strange things. However, Lunar Homesteaders could end up feeding each other and all of cis-Lunar space once things start picking up. And it’s not just food. There are all kinds of valuable biological products Homesteads could produce. Everyone is going to need comfortable underwear. Just saying.
Lunar Homesteads can offer tourists a unique experience. Each finished Homestead will have a different culture and feel. Tourists can have a “working vacation” by helping to build and expand the Homestead. Or Homesteads can have dedicated “guest” facilities and the tourists can just be tourists. Surface rides in protected vehicles could be offered. Maybe a casino. Homesteads will offer tourists interesting places to go to.
Science for hire
Homesteaders could be contracted to conduct scientific research for the private sector, government agencies, or academia. Lunar-based optical and radio observatories have been mentioned in many papers. Personally, I think observatories located on the surface would be more trouble than they are worth. Especially because of the dust. But hey, it would be great if someone wants to pay Homesteaders to build and operate one.
Homesteaders are going to be clever, ingenious people by default. Otherwise they probably won’t survive. So, it’s not a stretch that they would come up will all kinds of new technology and inventions to make their lives safer and easier. And then monetize them. Some of the new tech could substantially improve life on Earth as well.
Art, music, literature, TV, and movies also fall in this category. Homesteaders could create content as a side-gig or the settlement can make it a primary income stream. The possibilities are only limited by our (and their) imagination.
There are other entertainment income possibilities besides those mentioned above. Interesting rock specimens and tchotchkes manufactured on Luna could be included in shipments back to Earth. Remote controlled explorer rovers and construction robots could be controlled by paying Earth customers. Virtual speaking gigs could be arranged for Homesteaders. People will pay for all kinds of entertainment.
Luna is a great place to store things that you want to protect. Its environment is less volatile than Earth’s and it doesn’t have billions of volatile humans either (yet). Worried about all of human knowledge and art being snuffed out by a large asteroid? Store digital copies in multiple Homesteads and pay them well for that service. Want to immortalize yourself? Pay a Homestead to inscribe your name and bio on a Lunar basalt brick and place it, by robot, in a protected area outside. Or have some of your remains shipped to a Homestead and they’ll create a small monument to you. For a fee.
There’s nothing stopping Lunar residents from participating in Earth’s telework market. Well, there’s a 3 second communications delay (there and back) so that might make some jobs difficult. While minimum wage remote jobs might not be the best use of a Homesteader’s time; there are plenty of well-paying jobs that could help pay the bills. And since Homesteaders will be on-site (and with no communication lag), any teleoperations that involve Lunar robots could more effectively be done by “the locals” instead of Earthers.
These are just a few of the many options Lunar Homesteaders will have to pay down their debts and earn income. I welcome any suggestions you may have.
The first few Lunar Homesteads (or Homesteads in ANY location) are going to be expensive. No doubt. But costs will start to come down once the cis-Lunar economy starts to take off. As Homesteads multiply, we’ll eventually reach a point were all Luna really needs from Earth are high-tech components, critical resources (hydrogen, nitrogen, carbon, etc.) and people. High-tech components are usually lightweight and low volume so that’s not a problem. People are neither light weight nor low volume (when you factor in all the equipment needed to keep them alive) but are kind of the reason for this whole adventure so we’ll have to make it work.