By Ephrat Livni and Vivienne Walt
Just before the Russian-Ukrainian war reached its two-year milestone today, U.S. intelligence agencies warned that Russia could aim a nuclear weapon at an unusual target: not at a spot on Earth, but at satellites orbiting the Earth.
Putting a weapon into orbit is not just a military threat. It also poses a risk to the space economy – and those on the ground. There is a little-known but fast-growing industry that insures satellites but does not provide insurance against nuclear weapons.
What’s at stake: Hundreds of billions (and probably trillions) of dollars if we include services that rely on satellites, said David Wade, underwriter at the Atrium Space Insurance Consortium, which insures satellites for Lloyd’s.
Of the more than 8,000 satellites in orbit, thousands are owned by private companies, according to Orbiting Now, a site that collects real-time satellite tracking data from NASA and other sources. The Russian weapon is believed 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 ambitions in space. But the sharp drop in launch costs in recent years — driven largely by SpaceX — has opened up entry for many smaller players, sparking a frenzy in the satellite world that prompted the Federal Communications Commission last year to create a Space Bureau to open.
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 non-governmental satellite services at $113 billion in 2022.
Investments in the space economy are increasing rapidly. According to the most recently available estimate, space activity could total $620 billion this year. That’s up from $545 billion in 2022, according to an estimate from the Space Foundation, a nonprofit that promotes space education and entrepreneurship.
Aspirations for the space economy include mining for rare minerals and water, tourism, communications and data transmission infrastructure. On Thursday, an Intuitive Machines lunar lander, traveling on a SpaceX rocket, became the first private craft to land on the moon, which some hope will lead to the extraction of water that could be used to make fuel for more distant industrial missions.
A space weapon would also cast a shadow on other companies. Industries from agriculture to technology depend on satellites, and sectors such as shipping, transportation, banking and supply chain management depend on GPS, which uses satellites. The threat would also have “a depressing effect” on the valuations of space companies in general, said Donald Moore, CEO of the Space Finance Corporation and a lecturer in space policy 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 Defense Department is expected to release details of a new strategy to integrate commercial satellites into national security, Brian noted Weeden, the chief program officer for the Secure World Foundation, a space policy nonprofit.
Some are skeptical about the risk. The precise effects would depend on unknowns about the weapon, the company’s contingency planning and other factors. “We could still communicate,” says Henry Hertzfeld, a professor of space policy at George Washington University and a former chief economist at NASA. “We still have some landlines,” he added from his office phone. And he doubts that Russia will introduce this threat, as it would also jeopardize 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, anti-satellite equipment and nuclear reactions, nuclear radiation or radioactive contamination (except for radiation naturally occurring in space) are typically stated in a space insurance policy,” Wade said in an email.
The U.S. space model relies heavily on commercialization, noted Russell Sawyer, a space insurance broker at Lockton in London.
The loophole
>>There is a fast-growing industry that insures satellites, but does not provide insurance against nuclear weapons
>>Hundreds of billions of dollars if we include services that rely on satellites are at stake
>>This new threat could also put a dent in the US government’s plans to rely on private players
©2023 The New York Times News Service
First print: February 25, 2024 | 11:41 PM IST