Business Standard

The cost of nuclear war in space


Just before the Russian-ukrainian war reached its two-year milestone today, US intelligen­ce agencies warned that Russia might aim a nuclear weapon at an unusual target: not any place on Earth, but satellites orbiting in space.

Putting a weapon into orbit is not just a military threat. It’s also a risk to the space economy — and the one on the ground. There is a little-known but fastgrowin­g industry that insures satellites, but it doesn’t provide insurance against nuclear arms.

What’s at stake: Hundreds of billions (and probably trillions) of dollars when including the services that rely on satellites, according to David Wade, an underwrite­r at the Atrium Space Insurance Consortium, which insures satellites for Lloyd’s.

Of more than 8,000 satellites in orbit, thousands belong to private companies, according to Orbiting Now, a site that compiles real-time satellite tracking data from NASA and other sources. The Russian weapon is said to be designed to target satellites in low Earth orbit, where most commercial satellites operate.

Spacex’s Starlink dominates the space-based internet services industry, and Amazon also has big aspiration­s in space. But the sharp drop in launch costs in recent years — driven largely by Spacex — has made entry possible for many smaller players, leading to a satellite-business frenzy that prompted the Federal Communicat­ions Commission to open a Space Bureau last year.

Wade estimated the total value of all insured satellites in orbit at $25 billion. That doesn’t include the revenue they generate. The Satellite Industry Associatio­n estimated revenues for nongovernm­ental satellite services at $113 billion in 2022.

Investment in the space economy is increasing quickly. Space activity could total $620 billion this year, according to the most recently available estimate. That’s up from $545 billion in 2022, according to an estimate from the Space Foundation, a nonprofit that promotes space education and enterprise.

Aspiration­s for the space economy include mining for rare minerals and water, tourism, communicat­ions, and data transfer infrastruc­ture. On Thursday, a lunar lander from Intuitive Machines, travelling on a Spacex rocket, became the first private craft to land on the moon, which some are hopeful leads to mining for water that could be used to make fuel for more distant industrial missions.

A space weapon would cast a pall across other businesses, too. Industries from agricultur­e to tech depend on satellites, and sectors like shipping, transport, banking and supply chain management rely on GPS, which uses satellites. The threat would also have “a depressive effect” on space company valuations broadly, said Donald Moore, CEO of the Space Finance Corporatio­n and a space policy lecturer at the University of Michigan Law School.

The new threat could also put a dent

in the US government’s plans to rely on private players just as the Department of Defense is expected to release details of a new strategy to integrate commercial satellites in national security, noted Brian Weeden, the chief program officer for the Secure World Foundation, a nonprofit that works on space policy.

Some are sceptical of the risk. The precise effects would depend on unknowns about the weapon, company contingenc­y planning and other factors. “We could still communicat­e,” said Henry Hertzfeld, a space policy professor at George Washington University and former chief economist at Nasa. “We still have some landlines,” he added, speaking from his office phone. And he doubts that Russia will introduce this menace, as it would also endanger its space activities. Notably, it would also violate an internatio­nal space treaty.

But the risk is not covered by insurance. “Exclusions for acts of war, antisatell­ite devices and nuclear reaction, nuclear radiation or radioactiv­e contaminat­ion (except for radiation naturally occurring in the space environmen­t) are typically listed in a space insurance policy,” Wade said in an email.

The US space model depends heavily on commercial­isation, noted Russell Sawyer, a space insurance broker at Lockton in London.

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