On September 1, 2016, an anomaly during the fueling of a SpaceX rocket caused the vehicle to explode on the launch pad. While thankfully no one was killed, the event was still a major setback for SpaceX and entrepreneur Elon Musk in his effort to change the cloistered world of rocketry. Now the company appears to finally be poised to move past that event and regain its place at the head of the emerging private space industry.
On December 7th, the company announced “We are finalizing the investigation into our September 1 anomaly and are working to complete the final steps necessary to safely and reliably return to flight, now in early January with the launch of Iridium-1.” This is a critical step in returning SpaceX to its place as one of the most exciting and dynamic start-ups in the world right now. It’s also important for investors interested in the future of energy and the global economy.
In short, based on the information available right now it appears that the SpaceX anomaly was due to a problem with the interaction of super cooled oxygen used as part of the rocket fuel, and carbon fiber tanks aboard the vessel. Musk indicated that the issue is very complex in part because it has never before been encountered in the history of rocketry.
It’s important that SpaceX be able to move past this issue both for the future of the company and for the future of mankind. Until SpaceX came along to shake things up, the space industry had been largely government dominated with a few prime contractors acting as suppliers to governments around the world. Musk’s SpaceX along with a handful of competitors such as Jeff Bezo’s Blue Origin has completely shaken up that status quo.
The space industry had mostly stayed stagnant for 40 years after the U.S. moon landing – credit is due to Musk and his peers for changing the conversation. Today there are multiple companies talking about space tourism, mining asteroids, and evening taking private citizens to Mars to colonize the planet. That’s important because space exploration is arguably the biggest single potential boost to the global economy that’s on the horizon right now.
Take the colonization of Mars for instance; SpaceX is putting significant R&D dollars into developing vehicles that would actually take people to the red planet. Musk’s team has put real thought and effort into the project and it does not appear to be a PR stunt. Certainly the prototype components for Mars vehicles are impressive if nothing else.
If Musk can successfully colonize Mars it would completely change the global economy, eventually creating a much larger inter-planetary economy. One of the world’s big problems that is limiting economic growth is a low birth rate among advanced economies. The same issue afflicted Europe in the years prior to the settlement of North America – after North America was settled, birthrate on the continent skyrocketed in part due to significant opportunities in the new world. The same thing might happen on Mars.
Equally importantly, SpaceX is the embodiment of bold out of the box thinking. There have been many articles written by many economists and commentators in recent years about the slowdown in technology growth and resulting slowdown in economic growth. Part of this may be due to investor apprehension about taking big risks on new tech – certainly there has been plenty of apprehension about economic and environmental risks about new tech in the energy space. If SpaceX can get back to its old pattern of success, it is one step forward in giving investors the confidence to bet on new ideas in the energy sector and beyond.
By Michael McDonald of Oilprice.com
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