In a world where environmental and social concerns are rightly more important than ever for investors, the space industry has been engulfed in some unwelcome headlines in recent months.
However, technological advances in the past decade are enabling a new infrastructure to be created in orbit around Earth where space technology is becoming a vital part of the toolkit in areas such as environmental regulation, sustainable agriculture, humanitarian aid organisations.
This has to a large degree been enabled by the revolution in the cost and capabilities of rockets and satellites, such that the cost of going to space has been reduced by almost tenfold, while satellites have been reduced from the size of a tank to that of a shoebox, with a corresponding reduction in cost – yet with the same or greater functionality.
Partly that has been through Moore’s law, where the functionality of computer chips doubles each year, and partly through the deep pockets – and large government contracts – from the likes of Elon Musk and Jeff Bezos.
To give them some credit, Musk’s SpaceX and its development of reusable rockets has been the driving force in the plummeting cost of getting to space – though it would be remis not to mention that these privately owned companies are standing on the shoulders of giants at Nasa and in the academic sphere of rocket science.
Bringing the two elements of cheaper access to space and cheaper and smaller satellites has meant that even start-up companies can launch swathes of satellites, with powerful results, as explains Mark Bogget, chief executive of specialist asset manager Seraphim Space (Manager).
“These constellations of satellites that are gathering vast quantities of data or providing communication at a low cost – what we refer to as a digital infrastructure in the sky.
“That is enabling them to monitor our planet, to allow us to use resources more efficiently, to catch bad guys who are dumping effluent into a river, to monitor all sorts of illegal activities.”
Spire Global Inc (NYSE:SPIR), which was recently listed in New York, Planet Labs Inc, which is on the verge of joining it via a SPAC merger, and Finland based Iceye Oy, which is pre-IPO, are three prime examples.
Spire uses its constellation of 110 small CubeSats to observe data and predict environmental change and also provide maritime tracking services.
Planet Labs and Iceye, meanwhile, both provide what is called change detection, using their collection of satellites to photograph every inch of the Earth’s surface.
Planet’s technology was used to document the existence and size of the Uighur Muslims detention camps in China, a secret missile base in Iran and illegal deforestation in the Amazon.
Spire and Iceye, which are both part of the Seraphim Space Investment Trust PLC (LSE:SSIT)‘s portfolio, work separately and together on projects.
Spire’s tracking system precisely follows the AIS tracking system for every ocean-going boat from space, 24/7/365.
Iceye’s high resolution cameras are able to look down at the earth under all weather conditions day and night and see these ships in 20cm resolution.
“And when one of these boats wants to do something naughty, they switch off their tracker,” says Boggett. “When that happens Spire alerts Iceye, who uses their cameras to continue to monitor the new path of these untracked ships from space.”
By comparing the size and shape of the boat’s wake they can even calculate the weight of whatever the ship has just dumped, or if one untracked boat met up with another that also had its tracker turned off for potentially illicit activities.
Change detection is applicable to almost any sector from seeing how many bricks have been added to a building, providing security around heavy equipment kept on site or monitoring the aftermath of a natural disaster.
Iceye earlier this month announced two new corporate collaborations to provide flood hazard data, following another deal with the US National Oceanic and Atmospheric Administration (NOAA) to help monitor and respond to maritime environmental hazards.
SpaceX’s Starlink and Amazon.com’s Project Kuiper are selling their ESG credentials from providing telecommunications to remote areas, but there were also many important uses of space technology detailed by the United Nations Conference on Trade and Development (UNCTAD) in a study earlier this year.
These included case studies in public health, such as the South Africa Space Agency’s use of satellite data to locate informal settlements and monitor potential malaria and other pandemic hotspots; Japan’s Aerospace Exploration Agency, which mapped hard-to-reach areas to implement infectious disease control measures; and the German Aerospace Centre’s use of geospatial analytics to help provide evidence on air quality during the Covid pandemic.
In agriculture, Canada uses remote-sensing observation satellites from Radarsat to provide data to help farmers best distribute resources, while in several African countries use the satellite-powered Afri Scout app on the best place to their cattle herds.
“Companies providing services today are what you might call ‘V1’ – so that’s even before we get to ‘V2’ things like solar farms in space, agriculture in space and that sort of thing.”
The Seraphim Space fund has so far invested in almost 20 smaller and mid-sized players, including another sustainability-related addition today, while space focused exchange-traded funds like Procure Space UCITS ETF (LSE:YODA), its US-listed old sister Procure Space ETF (NASDAQ:UFO) and fellow US-listed SPDR S&P Kensho Final Frontiers ETF are picking and choosing among the larger satellite operator and aerospace behemoths for their portfolios.
However, environmental concerns about the impact of the space industry are still likely to be a concern for some investors, which is not surprising when you watch video footage of the lift-off of a Nasa rocket, which burn through fuel 11,000 pounds of fuel per second.
Never mind that Elon Musk’s and Jeff Bezos’ rockets have vastly cut this fuel usage, they still emit a large mushroom cloud’s worth of emissions as they scorch up through the stratosphere, with an estimated 200-300 tonnes of carbon dioxide – compared to up to three tonnes per passenger for a long-haul flight.
This is where V2 comes in, says Boggett, when rather than it costing US$1,000 per kg to send anything into space, it’s US$200 per kg.
“This opens up a whole range of in-space opportunities. So things like data centres in space, things like solar farms in space.
“A solar farm in space means lots of panels and the means to get that energy back down to earth. That means we’re going to stop burning fossil fuel. We’re going to clean up our planet, but we’re going to have this huge resource that is going to be very low cost but without damaging the planet. And we’ve all moved to electric cars at that point in time. So it really is a way of saving our planet.
“Think about agriculture in space, the number of people on the planet, we don’t have enough space to grow food to feed the planet. We can do in space there’s loads of space in space.
“And so, you know, ultimately there’s these challenges that are going to be addressed in V2…it’s going to make massive impact on the planet.”