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Cleaning Up Space Trash: A Billion-Dollar Opportunity?

Motley Fool - Sun Sep 3, 6:07AM CDT

In July 1996, a French Cerise satellite in Earth orbit was struck, and sent tumbling head over heels, after being hit by a used-up Ariane rocket stage (that also happened to be French). This was the world's first such recorded incident of a piece of space trash -- "orbital debris," which encompasses everything from defunct satellites, to spent rocket launchers, to bits and pieces that have fallen off, or been broken off of operational space assets -- damaging an operational satellite.

But it wasn't the last. Not by a long shot.

In fact, from August 2018 to August 2023, space companies and government organizations have reported no fewer than 18 separate incidents of orbital debris striking other satellites and rockets. As the field of space trash orbiting Earth continues to grow, it poses a clear and present danger to space companies attempting to launch new satellites into Earth orbit. But it could also be a gold mine for investors.

Space debris and satellites orbiting Earth.

Image source: European Space Agency.

"Hundreds of millions or billions of dollars"

How big of a gold mine are we talking about? Potentially, "hundreds of millions or billions" of dollars could be the cost of just beginning the effort to clean up all the trash in Low Earth Orbit. That's the estimate of Brian Weeden, a director at the Secure World Foundation, a non-profit organization devoted to space sustainability, as quoted in a CNBC article last week.

NASA has cataloged some 27,000 largish (from about two inches up to a yard in diameter) pieces of space junk in orbit. But even tinier debris can still do damage to a spacecraft when the debris itself is flying around at speeds of 17,000 miles an hour. And if you tally up the total number of smaller pieces of space trash in orbit, Weeden estimates "there's upwards of a million additional pieces of debris" up there, in addition to the 27,000 pieces we know about now.

Cleaning up that mess will take years, if not decades. And in the absence of any legal obligation for space companies to do the work, it will probably require governmental involvement -- and government contracts -- to get the ball rolling.

That's what Weeden refers to when he speaks of "hundreds of millions or billions" of dollars. That's the potential cost to NASA and other space agencies of enlisting private companies to devise solutions to the space trash problem. The new arrangements could be along the lines of past contracts, say, for resupplying the International Space Station.

The good news -- for space fans and for space investors alike -- is that this ball may already have started rolling.

Europe and NASA get to work

In 2026, the European Space Agency (ESA) plans to launch a spacecraft from Switzerland's ClearSpace SA "to demonstrate the technologies needed for debris removal." The spacecraft, Clearspace-1, will attempt to capture a defunct, 112 kg Vespa upper-stage rocket from orbit, and cause it to fall back to Earth to burn up in the atmosphere -- and collect $130 million for the work.

Playing a bit of catch-up in this field, NASA has announced it will pay a company called TransAstra some $850,000 (on top of a previous award for $2 million) to demonstrate how an "inflatable capture bag" might be used in orbit to scoop multiple pieces of debris simultaneously. As SpaceNews comments, this technology could be more economical than removing debris from orbit one piece at a time.

Millions...and billions

As technologies get developed and demonstration missions show the work can be done, the value of NASA contracts to clean up space trash should swell over time. And ClearSpace's ESA contract gives you an idea of just how big they might become. And if this were the end of the story, the opportunity for American space companies to profit from the space trash biz would already be enticing.

Lockheed Martin(NYSE: LMT), after all, has already bagged at least one contract worth close to $1 billion to build and operate a radar "space fence" to track orbital debris. Northrop Grumman(NYSE: NOC) has nabbed multiple contracts for its Mission Extension Vehicle -- which could also be repurposed into a space trash truck -- to do related work in orbit.

Along with its partner ThinkOrbital, however, TransAstra has floated a potentially even better -- and more lucrative -- idea in the form of collecting space debris and not burning it up in Earth's atmosphere, but instead collecting it for recycling into raw materials for manufacturing spaceships in orbit. Collecting debris for recycling in space could be as much as six times cheaper than pushing debris into the atmosphere, notes SpaceNews.

And when you consider that it costs about $10,000 to lift a pound of anything into orbit from Earth's surface, it seems a huge waste not to keep it there once it's arrived if there's any chance of being able to reuse it.

Meanwhile, from an investor's perspective, the potential for a company like TransAstra to take other people's space trash -- that other people paid to manufacture and launch into space -- and then collect it for free, recycle it, and sell it back to them at a profit -- sounds a lot like genius to me.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

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