Michael Byers holds the Canada Research Chair in Global Politics and International Law at the University of British Columbia.
A new economy was launched last month when SpaceX used a Falcon 9 rocket to deliver 11 communication satellites to orbit, then landed the rocket's first stage – all 41 metres of it, upright and undamaged – back at Cape Canaveral, Fla. SpaceX will seek to replicate that remarkable feat on Sunday when another Falcon 9 launches a single, larger satellite for the U.S. National Oceanic and Atmospheric Administration.
Getting to space used to involve building the equivalent of a Boeing 787 and discarding it after a single three-minute flight. Now, SpaceX can use its launch vehicles many times over.
SpaceX already offers the world's least expensive launches, with a per-kilogram price of $4,654 (U.S.) for cargo launched on a Falcon 9. It is also taking bookings on its next rocket model, the Falcon Heavy, at $1,698 per kilogram, with service to begin in May. These prices positioned SpaceX as the market leader even without rocket reusability.
According to SpaceX's founder, the visionary Elon Musk, reusability could now take these already low prices much lower, since fuel represents less than 1 per cent of the current cost of a launch. Launching one kilogram into orbit might soon cost less than airmail between continents.
Reusability will deliver huge profits to SpaceX on the 60-plus launches it has under contract, with a total value of more than $7-billion. Most of these contracts are with private companies, but they include a $1.6-billion contract with NASA to deliver supplies to the International Space Station.
SpaceX will dominate the launch market until other companies develop equivalent reusable rockets, which could take a decade or more. Its dominance will extend to launches of U.S. military satellites, which the company received approval to bid on last May. This large and lucrative arena had previously been monopolized by a 50/50 partnership of Lockheed Martin and Boeing.
Facing exponential growth in demand, SpaceX is building a spaceport on the Texas coast that will be capable of supporting several launches and landings a day.
Privately owned by Mr. Musk and several venture-capital funds, SpaceX was valued last year at $12-billion. Its value may have doubled as a result of last month's landing, and will climb again if another is achieved this weekend.
Rocket reusability opens many other opportunities. SpaceX is already planning its own network of 4,000 satellites in low Earth orbit to provide worldwide high-speed, high-bandwidth Internet. Consumers will benefit, but the infrastructure of land-based communications providers could be rendered obsolete.
Rocket reusability will drive down the cost of all satellite-based services, including imagery for farming, forestry, security, disaster relief and search and rescue.
Mr. Musk, who founded PayPal and electric car maker Tesla, has even grander plans. He believes rocket reusability opens the door to the colonization of Mars and a new era of trade if high-value minerals are discovered there.
However, the most immediate consequences will be felt by national space agencies in Russia, China and Europe. SpaceX is delivering on the 2005 decision to open U.S. space launches to commercial competition. This is good news for U.S. taxpayers, who have been paying the Lockheed Martin/Boeing monopoly at least $225-million a launch. But it is problematic for other countries, where satellite launches are provided by heavily subsidized state-owned companies that competed for private contracts to spread costs.
According to Mr. Musk, some of his family members worry that the Russians might even try to assassinate him. "Competitors are stepping on our toes," Deputy Prime Minister Dmitry Rogozin complained last month. "Look at what billionaire Musk is doing with his projects."
But it is too late to stop reusable rockets – and the new economy they have launched.