Thursday, February 4, 2016

Space Law Oddity: How Does Ownership in Asteroid Mining Work?


Glancing over headlines there’s clearly a lot we’ve got to sort out on Earth. But with Virgin Galactic and Blue Origin announcing promising advancements towards privatized space travel, can you blame anyone for looking to the stars?

Like Luxembourg, whose government announced on Wednesday that they would be investing in space mining companies and establishing a legal framework to entice people to engage with the activity. A new frontier, to be sure. So how exactly does the law stand around it now?

Space mining is not a new concept. As technological ability to reach space grew, coupled with greater understanding of environmental science on the planet, space bodies began to look pretty enticing. Asteroids vary in composition, but many can be rich in water or metals and minerals hard to find on earth—some estimates have the value of minerals mined from just a cubic meter in an asteroid at 1,000 billion USD


Add in the fact that there’s about 1700 near-Earth asteroids that are easier to get to than the moon, and it’s no surprise there’s already two U.S. companies vying to be the leader of a burgeoning industry.

Luxembourg is ready to get in on that action. In a statement yesterday Étienne Schneider, the country’s deputy prime minister, announced the company would be providing support for research and development (R&D) technologies to make space mining possible, as well as investing in companies directly.

“Our aim is to open access to a wealth of previously unexplored mineral resources, on lifeless rocks hurtling through space, without damaging natural habitats,” said Schneider. “We will support the long-term economic development of new, innovative activities in the space and satellite industries as a key high-tech sector for Luxembourg. At first, our aim is to carry out research in this area, which at a later stage can lead to more concrete activities in space.”

For now that means not “tax haven-type” advantages. Instead, Schneider says Luxembourg aims to give the infrastructure and R&D support companies need, even providing the opportunity to reimburse 45 percent of the company’s R&D investment. In his mind, companies have no more excuses to go to California.

Although there is one (at least for now): Last November, the President Obama signed the U.S. Commercial Space Launch Competitiveness Act (CSLCA), which allows U.S. citizens to own whatever they mine from an asteroid and bring back to the U.S. It seemed to fly in the face of the 1967 Outer Space Treaty, which would prevent mining for profit, only for the benefit of mankind. But as Space News reports, so far the U.S. legislation has been received positively:

The U.S. bill appeared headed for international legal protest because it endorses commercial extraction by U.S. citizens of resources from asteroids, the moon or other celestial bodies. But the International Institute of Space Law has issued a mainly favorable assessment of the legal validity of the Space Act, and senior European Union officials have as well.
Schneider likened the Space Act to fishing rights in international waters – the fisherman can harvest the resources without laying claim to ownership of the oceans.
He stressed that it is more than just legality. Luxembourg, he said, has a non-threatening, neutral-party reputation that might serve to blunt legal protests against space mining and elicit more international participation in a collective effort.

No doubt Luxembourg will soon have its own version of the CSLCA, in an effort to further entice extraterrestrial mining companies to their country. Schneider and his staff have encouraged European entrepreneurs to followin the footsteps of their American counterparts. No doubt a legal framework like the one Luxembourg is angling to create will spark opportunity for more to join the market.

But some hope that before that happens we can better sort out what those laws should look like. Tim Worstall, a contributor to Forbes, for instance, thinks there’s room for growth in the current space law:

That’s something which, if you look at the UN law, is impossible: Other people should have, under that law, access to such discovered resources. That’s just not going to work in an economic sense. The U.S. law is better, in that it clarifies ownership of extracted minerals, but it still doesn’t address this issue. Why would I go explore and prove a resource if the moment I have done it, anyone can mine it? What we need therefore is a system of ownership not just of minerals extracted, but of minerals not extracted.

Effectively, what we mean is that there has to be some way to stake a claim, and that claim has to be exclusive for some period of time. And it must cover some area (or with asteroids, perhaps a volume). For example, say someone found that Asteroid 123x had platinum in it that could be extracted. 

There must be some method of their being able to claim all of Asteroird 123x as being theirs, perhaps for some reasonable period of time to allow for organizing extraction or for the claim to fail if they don’t organize extraction. Asteroid mining law essentially has to mirror Earth-based mining law because we’re facing exactly the same problems. The prospecting and proving of a resource is akin to a public good. Once the knowledge is there, then just as with other innovations, anyone can copy it/turn up and mine it. So, as we do with inventions (patents, copyrights) we’ve got to protect that prospecting expense with an excludable claim.

This is what space law simply doesn’t include at present, and it’s the bit that absolutely has to be done before it can possibly be economic. Or, again, we must have the correct legal structure to protect property rights.

Whether Luxembourg will take a new approach remains to be seen. The country itself, though small (total population is over half a million), already boasts a pretty strong record in the space industry, home to several satellite operators including SES, so it’s not as if they’re new kids on the block. No matter what, this could be one giant leap for space law.



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