Energy supply from space, as proposed by Peter Glaser in 1968, requires low launch costs in order to be economic, which can only be achieved through large-scale operations of reusable launch vehicles. From market research and feasibility studies performed over the past decade, passenger space travel services, which also require low launch costs, appear to have the potential to develop into an industry as large as passenger air travel. The paper discusses the synergistic relationship between power supply from space and passenger space travel, whereby each may require the other for its realisation. While governments have been slow to adopt energy policies needed to avoid energy shortages and environmental destruction, the need for new industries to reduce record levels of unemployment world-wide may stimulate the development of passenger space travel - which could in turn stimulate the development of space-based solar power supply systems.

The central issue for the economic feasibility of nearly all business opportunities in space is the cost of launch to low Earth orbit. At some $10,000-20,000/kg, this has not fallen at all over the 47 years since Sputnik 1, despite the use of $1 trillion by OECD space agencies to date. However, by applying some of the wealth of technology that has been developed since 1957, it is surely possible to reduce launch costs very sub-stantially. At time of writing, this is no longer merely a theoretical possibility; the "SpaceShipOne" rocket-plane proved it on June 21 for sub-orbital launch.

In order to reduce launch costs as far as possible, two conditions must be fulfilled. First, fully reusable launch vehicles must be developed, following the successful philosophy used in all other transportation industries. The use of expendable launch vehicles which are used once only is unique to space transportation, and it is uniqely expensive. It arose from the cold war roots of government space activities: having developed long-range missiles in order to threaten each other militarily, the USSR and USA competed publicly in using them to launch satellites and then crews to orbit. (It is important to note that the partly-reusable US space shuttle was not designed to carry people to orbit at low cost, but to launch large spy satellites following military specifications, and it did not reduce launch costs. Despite this, it is often used to argue that reusable vehicles are more expensive than expendable vehicles; that conclusion is not justified.)

The second requirement for lowering launch costs substantially is a launch market that is capable of growing to large scale, in order for manufacturers to have reasonable production runs, and for operators of reusable launch vehicles to achieve the economies of "airline operations". The main market for launch services today is satellite launch; however, demand is limited to just tens of launches per year worldwide, of which only a fraction are commercial. Consequently development of a reusable vehicle to launch these satellites is estimated not to be justified economically. Although developing a reusable launch vehicle is commonly discussed as a technological problem, this second condition is fully as important as the first. Unless vehicles are designed to address a large, and therefore new market, they cannot reduce launch costs much below their level of the past 1/2 century.

One project that has potential to grow into a large launch market is space-based solar power supply. The construction of a system of orbiting satellites to supply a significant percentage of humans' electricity demand would need to deliver hundreds of GW of solar-generated electric power to Earth, which would use millions of tons of components in Earth orbit. It therefore has the potential to become a very large market for launch services, and has been used as justification for urging development of a reusable launch system. However, this possibility faces two problems.

First, the design of satellites for delivering power to Earth is still far from maturity. In particular, not even a Megawatt-scale pilot plant has been built and operated yet, although this is an essential step towards developing a commercial system [1]. Consequently, even if a suitable launch vehicle was available today, it would still take a considerable number of years, perhaps 20, before it would be possible to produce an operational, GW-scale satellite power system - let alone a commercially successful one. Thus space-based power supply to Earth cannot be used as a detailed design-driver for a new low-cost launch system today, even if it is seen as a possibly major launch customer in future.

Second, if space-based solar power systems are used to supply large-scale power to Earth, say as much as 100 GW, it is very likely to become economical for companies constructing satellite units in Earth orbit to use non-terrestrial materials (probably including lunar, asteroidal and cometary materials) thereby reducing the need for launch from Earth. That is, assembling solar power satellites in Earth orbit would create demand for hundreds of thousands of tons of aluminium, titanium, glass, glass-fibre, silicon, water, oxygen, metals and other materials which could be supplied at low launch cost either from the lunar surface or from other low-gravity bodies in near-Earth space.

Production and delivery capabilities for non-terrestrial materials could be expected to develop spontaneously. Once substantial demand for such materials developed in Earth orbit, genuine orbital markets would evolve, based on the large-scale demand from companies assembling orbiting solar power stations. Supply-side companies would spontaneously invest in developing the technologies necessary to supply non-terrestrial materials to these markets at competitive prices. As these activities grew they would limit the mass of materials and components launched from Earth. The development of large-scale solar power generation systems and microwave beam power transmitting antennas on the lunar surface, as advocated by Criswell [2], could reduce the launch mass from Earth even more.

Consequently, even with the successful development of space-based solar power supply systems, the scale of demand for launch services that would result is unclear, and might well remain much smaller than the 100,000 tons/year that is required for installation of 10GW/year as foreseen in both the 1978 "Reference System" design study [3], and the 1997 "Fresh Look" study report [4].

Another project which apparently has great potential to grow into a large-scale, near-term launch market is passenger travel services. Surveys carried out in a range of countries since 1993 have shown that the idea of taking a flight to space is immensely popular world-wide [5, 6, 7]. Recent studies performed for Nasa also indicate that passenger travel could grow rapidly once launch costs reach a threshold value of less than about $1000/kg [8, 9]. The precedent of civil aviation is instructive: passengers comprise much the largest market for commercial airlines, which nowadays carry several million passengers/day.

Cost estimates of dedicated passenger vehicles performed in Japan [10], Europe [11] and the USA [6] suggest that costs of $200/kg or less to LEO, or some $20,000/person, could be achieved at traffic rates of around 100,000 tons/year, or roughly 1 million passengers/year. At this level of launch costs the growth of demand would be limited only by supply capacity, and the space travel industry could grow to millions of passengers/year, based on the scenario developed as part of the 10 year Space Tourism Study Programme of the Japanese Rocket Society ( JRS) [10]. That study was in turn referenced in the very positive report of Nasa/STA study "General Public Space Travel & Tourism" [12].

It is noteworthy that even under an "aggressive" scenario reaching perhaps 5 million passengers/year within 30 years, still only 2% of the middle classes would have traveled to orbit, indicating that it would far from satisfy the demand: market research shows that the majority of people consistently say that they would like to take a trip to space. The public investment required to bring this scenario about is of the order of 10% of space agencies' existing budgets. Once the initial risky developments were undertaken, the great majority of the investment could be expected to come from companies, as in aircraft manufacturing, ship-building, airlines, cruise-lines, hotels and other related industries today. Government involvement is also required for the creation of a safe but encouraging regulatory environment.

The sharp reduction in launch costs that would be brought about by the growth of passenger space travel services according to this scenario would stimulate a range of new developments in space, including possibly the capability to supply solar-generated power economically to Earth. That is, at this low level of launch costs, delivery of power from space to Earth would have the possibility to become economically competitive with other sources of electricity. These arise from the fact that the feasibility of both activities depends on achieving similar launch costs of around $200/kg to LEO, as discussed in [13]. Consequently, development of passenger space travel could be the key to realising economical solar power supply from space by generating the operational scale economies needed to reduce launch costs sufficiently.

Propellant requirements for a scenario in which demand reaches 700,000 passengers/year were estimated by Hanada et al [14] as part of the JRS study. In round figures, existing rocket technology requires roughly 10 tons of propellants per passenger reaching low Earth orbit, which is more than ten times that required for a typical international airline flight. As mentioned above, this cost seems to be low enough to attract a rapidly growing number of passengers/year, which would lead to rapid propellant demand growth. Production of 8 vehicles/year, each performing 300 flights/year carrying some 500 tons of propellants, in the ratio of 6:1 LOX: LH2 by weight, was estimated to require production capacity growing by nearly 150,000 tons/year/year to reach more than 1,000,000 tons/year [14]. If this quantity of liquid hydrogen was produced using electricity, it would require the total output of power stations with capacity of the order of 10 GW. Achievement of, say, 5 million passenger flights/year to orbit would thereby use electrical output capacity of the order of 50 GW.

The overall world energy supply/demand situation through the 21st century cannot be known in advance. However, if serious shortages of energy were to arise in coming decades, with market prices rising to levels that impeded economic development of poorer countries, it is imaginable that space tourism activities might become the subject of criticism for using relatively large quantities of energy, or even for "stealing energy from the poor of the world".

In truth, if such an unsatisfactory situation arose, it would be because of poor energy policy-making by the governments of all the countries of the world, rather than being the responsibility of any single business activity. In particular, such an "energy crisis" would result from the richer countries having failed to invest sufficiently in developing new, clean energy supply technologies, the need for which has long been described definitively by leading scientists [15, 16].

However, this large power requirement for passenger space travel creates, as it were, a second synergy between the two activities of passenger travel and space-based solar power supply. That is, if passenger space travel services grow into a sufficiently large activity, it might even require the development of space-based power supply in order to be able to purchase sufficient propellant supplies at economical prices. That is, if the cost of passenger space travel services did indeed become cheap enough for demand to grow to such large scale, propellants needed for passenger space vehicles might come to be produced with power supplied from space. Once space solar power supplies were developed for this purpose, they would of course constitute a potentially unlimited supply of solar-generated electricity for the world economy.

Consequently, although it may seem "heresy" to suggest that solar power supply from space may be developed in order to enable passenger space travel services to expand, rather than to satisfy world-wide energy demand, this appears to be the logical direction for commercial space development. This echoes an idea expressed by Hanada et al:

"The main field of a large scale hydrogen use under study is clean energy to substitute carbon fuel for terrestrial use in large scale. However, demand for hydrogen as clean energy is a matter of the future of humankind which is too general to be a driving force to motivate technology development for large scale liquid hydrogen supply systems. On the other hand, demand of rocket propulsion for space tourism is definite, especially in the requirements of cost and quantity" [14].

Hence any putative criticism of "excessive energy use" by space tourism services might be answered by the industry effectively making itself independent of terrestrial energy supplies, through importing energy from space.

The current rapid restructuring of the world economy is a result of long-term economic trends driven fundamentally by technological progress: as industrial productivity grows continuously through advances in engineering and management methods, less and less human labour is required in order to satisfy people's needs. For example, through the 20th century the number of people employed in agriculture and horse-drawn transportation fell from about 50% of the populations of the rich countries to just a few percent. The displaced employees were re-employed in new industries such as the motor industry, the aircraft industry, and the many related activities including road and airport construction and operation, airline and hotel management, and others. It is the development of such new industries offering new services and products that prevents unemployment from rising as the number of people employed in older industries declines.

However, in recent years there has not been sufficient growth of investment in new industries. The highest levels of unemployment throughout the world since the Great Depression of the 1930s, despite the highest ever standards of living worldwide, are a reflection of this situation. The only lasting solution to the problem of unemployment is the development of major new industries - as recognised in the comment bemoaning the weakness of the US economy in 2001:

"What this country needs is a really good $500 billion technology - something to reignite popular enthusiasm and the economy" [17].

In considering what new industries may be developed, there are a number of clear trends that can be seen in the richer countries. Overall, in parallel with the proportionate decline in the share of work necessary for survival (ie food, clothing, accommodation, machinery manufacture), a growing proportion of expenditure in the advanced countries is "discretionary" - that is, used to buy services and goods that people wish to have rather than need. One reflection of this is that the rate of growth of leisure industries (broadly defined) is faster than the rate of overall economic growth, reflecting the relative expansion of these activities within the economy. Another trend that is clearly visible as average salaries increase is that people purchase more travel services. Seen against this background, the growth of passenger space travel services into a major new industry like passenger air travel, far from being a "trivial use of space" as it has been called, would be a continuation of fundamental trends that have been operating in the world economy for centuries already.

The present stagnation of the space industry is therefore surprising. In view of the well-known popularity of the idea of visiting space, and the potentially low cost of providing such services - at least initially in the form of sub-orbital flights - it would have been easy for space agencies, which have statutory responsibility to encourage commercialisation of space activities, to have taken an initiative in this direction. Instead, the space industry has declined to make any effort in this direction, and remains heavily loss-making, dependent on government support of some $20 billion/year. Commercial space activities are in fact shrinking rapidly in terms of numbers of employees in the richer countries. (The deceptive practice of counting revenues from TV programmes broadcast via satellite as "space industry" revenues has apparently been adopted recently as a means to obscure this fact: a recent article reporting that worldwide commercial launch services fell from only $900 million in 2002 to a mere $700 million in 2003, also referred to TV broadcast sales, which permitted the headline: "Satellite Industry Revenue Jumps 6% in 2003" [18].)

This failure can be considered surprising because, in order for space agencies to encourage development of commercial space activities they must develop services which the general public wish to purchase - by definition. Consequently, the failure to develop the travel services which the general public are known to wish to buy has inevitably prevented the space industry from growing, and left it dependent on large government subsidies. Commercial demand for satellite-based telephony, broadcasting and remote-sensing services is limited, and is not expected to grow significantly in future. In this situation, the decision not even to investigate the feasibility of passenger space travel shows a serious lack of concern by space policy makers for their economic responsibilities.

The demonstration by Scaled Composites Inc of a piloted sub-orbital space flight at a cost approximately 1/1,000 of that using an expendable vehicle shows that the initial investments required are so small that they would be insignificant by comparision with existing space agency projects. The total project cost of some $20 million is less than a day of Nasa's expenditure, less than a few days of Jaxa's expenditure, and less than a few weeks even of the BNSC's expenditure. Yet it offers more economic potential than the 1,000 times greater cost of all of the work of these agencies combined. There is thus an urgent need for the government-sponsored space industry to change the collective culture it has developed, from being opposed to passenger space travel to being supportive, following the precedent of governments' much more successful role in civil aviation [19, 20].

As part of their efforts to reduce the level of unemployment, which is unpopular with voters, government representatives emphasise the need for innovation, not only in OECD countries but also in such fast-growing regions as south east Asia. Innovation is indeed vital for the continuation of growth in the world economy, which in turn is vital to enable poorer people to reach higher standards of living - although it is increasingly clear that the process of industrialisation must be improved in order to minimise environmental damage.

However, innovation always faces resistance because it is disruptive, displacing those who benefit from existing arrangements, as Niccolo Machiavelli famously described more than 500 years ago. For this reason government monopoly organisations such as space agencies are famously poor at innovation, due to the well-understood characteristics of bureaucratic organisations. A good example of this is that, if space agencies gave higher priority to economic rather than political objectives, sub-orbital space flight services could have started more than three decades ago [21]. At a time when the commercial space industry is shrinking rapidly, it is surprising that government economic policy makers have still not insisted that space agencies contribute to economic growth through developing popular space travel services, rather than remaining an unprofitable burden on taxpayers.

If sub-orbital space flight services had indeed started during the 1970s, orbital space travel services could have started during the 1980s. Due to the synergistic relationship described above between passenger space flight services and solar power supply from space, this would have stimulated progress towards testing the feasibility of space-based solar power supply, at least in the form of a pilot plant. We would thereby be in a much better position today to judge the potential of such systems for energy supply to Earth. The central role of energy supply industries both in raising living standards and in damaging the environment makes this the central policy issue of the 21st century. The continuing failure to even test the concept of space-based solar power supply with a pilot plant, more than 35 years after the concept was first proposed, continues to deprive the human race of one of the quite few options that could possibly enable living standards for all to continue to grow indefinitely. Growth of passenger space travel services in the coming years may finally lead to this highly desirable development.

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