From: gary@ke4zv.uucp (Gary Coffman)
Newsgroups: sci.space
Subject: Re: Lunar landing in 2002
Date: 28 Sep 92 12:42:07 GMT
Article-I.D.: ke4zv.1992Sep28.124207.3862
Reply-To: gary@ke4zv.UUCP (Gary Coffman)
Organization: Gannett Technologies Group

In article <1992Sep26.235129.21728@techbook.com> szabo@techbook.com (Nick Szabo) writes:
>In article <1992Sep26.151124.25081@ke4zv.uucp> gary@ke4zv.UUCP (Gary Coffman) writes:
>>...US private industry won't fund
>>a return to the Moon because the results won't show up in their bottom
>>lines in the less than six months timeframe that institutional investors
>>will allow them for venture investments.
>
>This is silly socialist rhetoric.  Chevron, among others, is planning 
>their oil operations in Siberia out beyond 2030 -- forty years.  The 
>government rebudgets every year, with priority on pork that will get 
>the congresscritter reelected in two years. Which sector has 
>the longer term thinkers?

Chevron, and other utilities and quasi-utilities do make long range
investments, but the overall risks are low and well understood. When 
the risks of space exploitation reach similarly low and well understood 
levels, there won't be a problem with investor owned utilities working 
in space. Comsats have already reached that point. Chevron knows that
the old J Paul Getty adage is true that drilling lots of wells will
find oil. They've done it for a long time and have a solid track record.
They know they can afford 10 dry holes for every well they hit because
they have a firm understanding of the large return that one well will
generate. Nowhere has anyone yet hit a gusher in space that justifies
a lot of dry holes.

Governments, though subject to year to year political infighting, can
make long range high risk commitments since they aren't required to
show a quarterly profit to their investors, the taxpayer. Even Chevron's
long range plans are subject to political pressures both inside the
corporation and outside the corporation. A new management team may
decide to scrap old plans, or regulations or the political climate
may change in ways that force the company to rethink their plans.
It's really not that different from government operations except for
the expectation of both short and long term profits. 

A company has to insure a continuing cash flow to carry it to the point 
where a long range investment starts to pay off. Thus they limit the 
amount of capital they will put at high risk and keep their long range 
investments either low risk or low cost or both to insure that the company 
won't be in trouble if they don't pan out as expected. Most space ventures
aren't low risk or short term enough to meet with utility approval.

Venture firms are different. They tend to bet the farm on one high
risk idea. If it doesn't pan out, they fold. Therefore venture capitalists
tend to only fund companies working in a "hot" area, and place demands on
the company to generate a large return in a short time. Since most
space exploitation projects don't have short timeframes on their returns, 
venture capitalists tend to avoid them. 

Only the government has both deep pockets and the ability to wait 
long periods for a high risk economic return.  Governments must, 
however, have a quick and continuing *political* return. Basically 
that means grassroots support among the voters, and/or large political 
contributions from contractors. Thus government programs tend to be 
both Buck Rogers and expensive, fulfilling both objectives. The critical
difference is that government at least *does* projects in space while
private industry takes a less risky road of riding a government contract
or investing only in safe established space activities like comsats.

Gary
Newsgroups: sci.space