PROPERTY RIGHTS IN SPACE PART 2

This is Part 2 with excerpts from Rand Simberg’s important article in the journal The New Atlantis (Washington D.C.) in the Fall 2012 issue. It deals with a proposal for legislation (Space Settlement Prize Act). Excerpts below:

The Space Settlement Institute, a New York-based advocacy group,…[proposes] legislation it calls the Space Settlement Prize Act, which, if passed by Congress, would require the U.S. government to recognize and legally support land ownership claims “for any private entity which has, in fact, established a permanently inhabited settlement on the Moon, Mars, or an asteroid, with regular transportation between the settlement and the Earth open to any paying passenger.” The act explicitly defines a “private entity” as “a company, a consortium of companies, and/or one or more individuals that are not controlled by any sovereign state or government.”

This regime would seem to resolve the sticky issue of the Outer Space Treaty’s prohibition of “national appropriation.” For example, a corporation based in Canada could start and inhabit a settlement on the Moon without either the Canadian government or the corporation making an explicit property claim — but the U.S. government could say that it recognizes the corporation as having valid property rights in the lunar land that it settled. Under this you-scratch-my-back-and-I’ll-scratch-yours arrangement, neither the Canadian government nor the U.S. government could be said to be violating the prohibition of national appropriation.

The privately held space settlements envisioned by the proposed Space Settlement Prize Act would not be under the sovereign jurisdiction of any terrestrial nation (although the individual citizens would still be subject to the laws of their own nations). The corporations who own these settlements would be able to pass local laws, and could, in theory, apply for U.N. recognition and become an extraterrestrial nation-state capable of granting citizenship to its residents.

More importantly, this legal regime would offer needed assurance that private property rights could be secured by those who undertake the high costs of space exploration and settlement — but it would set the bar high enough to permit only serious property claims.

The act as currently drafted would permit the first claim on the Moon to be no larger than 600,000 square miles — roughly 4 percent of the total lunar area, or about the area of the state of Alaska. The first claim on Mars could be up to 3.6 million square miles — roughly 6 percent of its area, or about the area of the United States. Each subsequent claim is reduced by 15 percent of the previous, and no entity is allowed multiple concurrent claims on the same body, so as to prevent monopolies. For asteroids or other bodies, claims of up to 600,000 square miles would be allowed, unless the body had total area of less than a million square miles, in which case the entire body could be claimed. Claims staked on the Moon, Mars, or asteroids would have to have a “contiguous, reasonably compact shape.”

Where do the numbers come from? The U.S. General Mining Act of 1872 generally only permits land claims of around twenty acres. And while traditional land claims in the United States were forty acres (or one-sixteenth of a square mile), this was based on what was once considered sufficient size for a farm. So why should such large claims — hundreds of thousands of square miles — be permitted on the Moon, Mars, and asteroids? Because large claims would enable land sales to others in exchange for cash or other items of value. The goal of the proposed legislation is to allow for claims large enough to serve as collateral to raise necessary funds for development.

In the scenario envisioned here, the government would recognize claims and register titles, and claimants could then begin to grant, sell, and trade property deeds. The first claim would be the hardest to raise money for, which is why it would be the largest, and would also have the advantage of being able to select the most apparently promising land. For example, were this law in place today, a company like Shackleton Energy would be able to raise funds by selling its stock, the value of which would be based on the promise of the future value of the claimed lunar land itself. Once it had sent the initial settlers to the Shackleton Crater, it would apply for the title, after which it could actually start selling plots. Many, perhaps even most of the purchasers would do so with no intention of ever going to the Moon, but rather would hold their deeds as speculative investments like any other high-risk, high-reward venture. The act of selling the land would be similar to an initial public offering for the company. Once the company had raised sufficient funds with the land sales, it could afford to invest in the facilities to start to harvest ice and other resources for the manufacture of propellants, air, and other valuable materials. Similarly, asteroids or comets with favorable orbital and compositional characteristics would be the first targets of other space-resource companies, leaving less desirable real estate for the stragglers.

Setting aside the potential environmental and diplomatic concerns about the Space Settlement Prize Act, what would be the fiscal impact on the United States of passing such legislation? If we were pledging not only to recognize, but also to defend such claims, then it could require an increase in the Pentagon’s space budget (or perhaps that of the U.S. Space Guard that James C. Bennett has proposed in these pages [Winter 2011]) that would be difficult to estimate. But the Space Settlement Prize Act as currently drafted explicitly states that it “makes no pledge of military defense of recognized extraterrestrial properties.” Recognizing and defending property claims might result in costs to our international relations, in terms of diplomatic fallout or trade sanctions. But none of this need necessarily result in dollar costs to the U.S. government.

Another cost would come from the need to survey the land. But this could be done by claimant, and verified by an independent entity, at the cost of the claimant, to prevent fraud. Such a survey is well within the capability of current technology and the means of private players. NASA has just released the first high-resolution topographical map of the entire lunar surface, with a resolution to 100 meters, generated by the Lunar Reconnaissance Orbiter launched in 2009. Technology is advancing rapidly in this area, and the necessary survey would be quite affordable in the context of the overall project.

Of course, in order to maximize the probability of achieving the goals of the proposed legislation, it would be useful to invest in the development of fundamental space technologies — something that NASA has traditionally done very poorly for political reasons. This could mean a refocusing of NASA’s mission, and a concomitant increase in its budget. These technologies might include things like life-support systems, techniques for processing lunar resources, nuclear reactors capable of running in space, advanced propulsion systems, and cryogenic storage. It might also be useful to put into place GPS-like navigation systems around the Moon and Mars, and beacons out in the solar system. But the proposed legislation does not require any of this, nor any other necessary significant costs to the taxpayer.

The backers of the proposed Space Settlement Prize Act argue that the government of one country could recognize a property right on behalf of a private entity from another country without engaging in a prohibited act of national appropriation.

Whether or not this interpretation of the OST holds water remains to be seen, since the precise meaning of the OST’s restrictions remains an open legal issue for American legislatures and courts.

If [the United States] were to withdraw from the treaty to implement this legislation, would other countries counter with their own legislation recognizing different property claims? In an April 2012 post at Wired.com, space-law analysts Berin Szoka and James Dunstan asked what might happen if the United States began to recognize property rights in outer space: “What would stop the Chinese from adopting domestic legislation that went further? What if the first time a Chinese probe lands on the moon, the moon could be claimed by the ‘Great Wall Company,’ owned by the People’s Liberation Army?” Unless we assume that China is plotting lunar domination, it seems reasonable that spacefaring countries like China, Russia, India, and Japan may be willing either to initiate a new treaty or to amend the OST, given the advantages that opening space settlement to private investment and settlement could have for the global (and extra-global) economy.

Finally, it is worth noting that, while the OST arguably does not prevent the recognition of property claims per se, it may prove to be a hindrance to any kind at all of large-scale space activity, not just settlement. In that regard, this is the most troublesome sentence in the entire treaty: “The activities of non-governmental entities in outer space, including the moon and other celestial bodies, shall require authorization and continuing supervision by the appropriate State Party to the Treaty.”

Consider the implications of the words “continuing supervision,” if taken literally. It could be argued that satisfaction of this requirement would demand that any person operating off the planet would be required to have a government minder with him at all times. Prior approval — for example, a launch license —might not be sufficient, because supervision could be argued to imply not just observation, but physical control. This wording in the treaty could imply that even the remote monitoring of private activity in space, which itself would be a significant hindrance for space settlement, would be insufficient.
With new affordable spaceflight technologies on the horizon, extensive private activity in space will be a serious possibility in the near future. If we wish to see humanity flourish in space, we have to recognize that the Outer Space Treaty is a relic of a different era. Fresh interpretations may not suffice: we may soon have to renegotiate and amend the treaty — or even completely scrap it and start from scratch — if we want not just to protect space as a mere scientific preserve but to open it for settlement as a grand new frontier.

Rand Simberg, an adjunct scholar at the Competitive Enterprise Institute, is an aerospace engineer and a consultant in space commercialization, space tourism, and Internet security. His blog, Transterrestrial Musings, can be found at transterrestrial.

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