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Assessing the Utility of a U.S. Strategic In-Space Propellant Reserve:

Economic Development in Low Earth Orbit and Cislunar1 Space

National Space Council Users’ Advisory Group 

Economic Development and Industrial Base Subcommittee

September 3, 2020

1 Defined here as the region of space between the Earth and the orbit of the Moon.

The content of this paper reflects the thoughts and opinions of the subcommittee’s 

authors, and should not be construed as a recommendation of the full National Space 

Council Users’ Advisory Group or the official policy of the United States Government, 

the National Space Council, or the National Aeronautics and Space Administration
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Purpose

This paper discusses the potential for a new and significant commercial economy to be created in 

space, with particular focus on how the United States Government (USG) might both stimulate 

and secure it by way of an in-space propellant reserve, maintaining America’s leadership in space 

and enhancing our global economic position.

Background

We will soon reach a moment in time where both America’s industrial capabilities and our 

understanding of space, the Moon, and near-Earth objects (NEOs) will make it possible to establish 

significant commercial activities in this region. Space has several unique attributes: microgravity, 

hard vacuum, radiation, natural resources, novelty, and its location as a global high ground. There 

are several new economic activities that can be derived from these unique attributes. These include 

specialty manufacturing, industrial research, tourism, energy, and natural resource mining.2 For 

example, there are a number of useful and high purity materials that can only be practically 

manufactured in space where the influence of gravity to separate materials by density or prevent 

complex microstructures is eliminated.3

One significant potential in-space economic activity is industrial development of the retrieval of 

natural resources from space, recently recognized as a key aspect of U.S. and international 

activities in space.4 Over the last 50 years it has been discovered that many useful materials exist 

on the Moon and NEOs. Solar wind volatiles, particularly hydrogen, helium (including the fusion 

fuel 3He), carbon, and nitrogen, exist in the lunar regolith in significant concentrations and are the 

most readily available resources.5 Iron, silicon, aluminum, magnesium, chromium, calcium, 

nickel, titanium, and trace amounts of molybdenum, rhenium, and other metals are the building 

blocks for in-space construction, eliminating the need to bring everything from Earth at high cost 

and logistical difficulty.

6 Water can be produced from water-ice present at the lunar poles or by 

heating the hydrogen-rich regolith. For example, deployment of resilient habitats, environmental 

control systems, transportation systems, and power generation and transmission capabilities on the 

Moon and NEOs that are necessary for long-term, sustainable space exploration and development7

2 Weinzierl, M. (2018) “Space, the Final Economic Frontier,” Journal of Economic Perspectives 32, no. 2 (Spring 

2018): 173 – 192.

3 Downey, J. P. (2016) “Microgravity Materials Research,” in A Researcher’s Guide to the International Space 

Station, NASA ISS Program Science Office, July 6, 2016. https://www.nasa.gov/sites/default/files/atoms/files/np2015-09-030-jsc_microgravity_materials-iss-mini-book-508c2.pdf 4 The White House (2020) “Executive Order on Encouraging International Support for Recovery and Use of Space 

Resources”. April 6. https://www.whitehouse.gov/presidential-actions/executive-order-encouraging-internationalsupport-recovery-use-space-resources/ 5 Schmitt, H. H., 2006, Return to the Moon, Springer, and references therein.

6 Lewin, S. (2018), “Making Stuff in Space: Off-Earth Manufacturing is Just Getting Started,” Space.com, May 11, 

2018, https://www.space.com/40552-space-based-manufacturing-just-getting-started.html 7 The White House/National Space Council (2020), “A New Era for Deep Space Exploration and Development”. 

July 23. https://www.whitehouse.gov/wp-content/uploads/2020/07/A-New-Era-for-Space-Exploration-andDevelopment-07-23-2020.pdf
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will require and spur industrial activity making use of such metals, together with volatiles and 

other materials. Because of the low gravity of these bodies, it is hoped that these deposits are 

accessible and, therefore, can be extracted, although the very low gravity of NEOs present 

significant production challenges. Production of life-support and propulsion consumables from 

solar wind volatiles on the Moon are possible within the next decade or so. While development 

of the industrial capability to access and make use metals and other materials “in situ” (on site) 

will take longer, designing and securing the infrastructure that supports it is a task that should not 

continue to be postponed: The nation that first profitably develops these resources will secure a 

position of global economic and geopolitical leadership for generations to come.

Transportation

Because of the vast distances of space, transportation is one of, if not the, key practical elements

required to develop these resources and return them to Earth for use. Unfortunately, the cost of 

space transportation is currently very high and effectively inhibits the initiation of this space 

economy. Today’s costs are approximately $10,000/kg to $50,000/kg to take material to and 

through space, depending on destination and the size of the rocket (larger rockets being somewhat 

more efficient relative to this measure, by virtue of their scale). 

The cost of transportation in space is driven by factors that are somewhat different than here on 

Earth. The distance to be transited from one point on the globe to another is an important factor 

on our planet. Distance in space, however, is largely irrelevant with respect to cost. Space 

transport costs are driven by the mass and heavily influenced by the gravity of the bodies that are 

traveled between. While relatively easy to transit between asteroids with low gravity, the cost to 

transit in and out of Earth’s gravity well – and that of other planetoids – can be a major cost factor.

Today, everything we use in space is carried there from Earth. This includes propellant. Rockets 

are the primary means of space transportation and a rocket, unlike a terrestrial vehicle, is mostly 

propellant. For ships, trains, planes, and trucks, the cargo is a significant portion of the total mass 

of the vehicle, with the fuel usually being the smallest portion. Rockets are exactly the 

opposite: 80% of the mass of a typical rocket is propellant and often only 1% or so of its initial 

mass is the cargo. If propellants were available in space, the cost of in-space transportation could 

be significantly reduced, depending on the burdened cost of production, thus potentially enabling 

meaningful economic development.

Space Resources for Propellant

Fortunately, it has also been discovered that the raw material for manufacturing propellant in space 

also exists there in abundance. The most readily available rocket propellants currently in use are 

oxygen and hydrogen, the building blocks of water, with oxygen and methane also potentially 

competitive. It is now known that water, in the form of ice particles, resides in large quantities at 

the poles of the Moon and on NEOs. It is estimated that over twenty billion metric tons of water 

exists at the lunar poles. Water also can be produced directly from the lunar regolith through the 

combination of solar wind hydrogen with the oxygen in glass and mineral particles. Water’s
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availability, both on the Moon and other bodies throughout the Solar System, such as asteroids, 

moons, and other planets, makes it the “crude oil of space.”

Once extracted, there are several methods for converting this water into propellant. Perhaps the 

simplest one is electrolysis. When electrical current is passed through water, it readily breaks 

down into oxygen and hydrogen. This is a common high school chemistry experiment that many 

children perform every year. While the power requirements for extraction and processing of lunar 

volatiles (for example) is significant, electricity could be generated for this process in space via 

solar, nuclear, fuel cells, or other means.

In-Space Propellant Reserve

The factors described above provide an opportunity for the USG to take a single, high leverage 

action to help enable the eventual development of a new commercial economy – specifically, the 

creation of a U.S. Space Propellant Reserve, modeled after the U.S. Strategic Petroleum Reserve 

(SPR). Propellant is a necessary commodity upon which all manner of in-space operations 

depends – among them, on-orbit operations and operations in deep space, emplacement of in-space 

communications infrastructure, safety of crew members and passengers, and rescue. Such a 

reserve would facilitate these functions as well as enable three key outcomes.

First, it would stimulate economic development by reducing uncertainty regarding availability of 

propellant, enhancing confidence for governments and private interests alike. Secondly, it would 

buffer U.S. future in-space economic interests from temporary interruptions in supply. Finally, a 

reserve would also provide a significant means to help stabilize a future space commodities 

exchange, in which forward purchases (futures) of commodities such as water, oxygen, hydrogen, 

metals, and propellant, could be traded.8 All of these commodities are driven by transportation; 

therefore, investing up front in a strategic reserve can enable greater predictability in access, 

delivering, and utilizing them, creating some assurance and greater security in commercial activity.

These three outcomes would also help to address the growing aspirations and intentions of other 

nations to establish leading positions in the economic and strategic use of Cislunar space. China, 

for example, shares with the U.S. a determination to achieve a leading position in Cislunar space, 

viewing it as of immense strategic value and also as a means to develop economic value by 

participating in – or dominating – a space-based economy via the development of solar power and 

resource utilization/exploitation.9

8 Cahan, B.S., Pittman, R. B., Cooper, S., and Cumbers, J (2018) Space Commodities Futures Trading Exchange: 

Adapting Terrestrial Market Mechanisms to Grow a Sustainable Space Economy. New Space, September 1. 

Retrieved at https://www.liebertpub.com/doi/abs/10.1089/space.2017.0047?journalCode=space 9 U.S. – China Economic and Security Review Commission, “China’s Ambitions in Space: Contesting the Final 

Frontier,” in 2019 Annual Report to Congress, November 2019. https://www.uscc.gov/sites/default/files/2019-

11/Chapter%204%20Section%203%20-%20China%E2%80%99s%20Ambitions%20in%20Space%20-

%20Contesting%20the%20Final%20Frontier.pdf
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As on Earth, the presence of a strategic reserve would protect U.S. interests – whether public or 

private – from potential disruptions in the production or transport of this crucial commodity. More 

broadly, the creation of space commodities exchange, which has been recommended as a means 

by which “...the United States drives the creation of international standards for interoperable space 

commercial space capabilities,”10 will require foundational elements that could include 

government-backed financing models as well as space-based infrastructure that would support the 

exchange.

Alternatively, USG stimulus of private sector investment in a Strategic Propellant Reserve, 

through initial tax policy, loan guarantees, and/or being a confirmed anchor customer, might have 

advantages over a government-owned Strategic Propellant Reserve. It could be less costly to the 

taxpayer than a government owned and managed reserve as well as providing additional symbiotic 

commercial opportunities.

On Earth, the SPR holds over 700 million barrels of crude oil. It protects the U.S. from 

interruptions in supply of not less than 90 days. The Department of Energy administers the reserve 

under the control of the President. It was established via a USG investment of $5B in infrastructure 

and through the initial acquisition of $21B of crude oil. Today, it both provides a backstop to 

manage disruptions in supply and generates revenue through sales and exchanges both to USG

customers and to other, commercial entities with whom it contracts.

11

This government or private infrastructure, and its resulting commercial propellant availability, 

could be a critical enabler in the creation of the full spectrum of economic activities in space. This 

single action of the USG could stimulate the creation and growth of an enormous new economic 

activity, and ensure America’s leadership across the globe and beyond, while also improving the 

economic stability of the world economy and improving the general state of human dignity that 

would naturally result.

Recommendations

This paper is a first step exploring the concept of a strategic in-space propellant reserve; however, 

to develop it the concept should undergo further detailed study including the trade-offs between a 

government or private approach. The following recommendations are offered:

1) The National Academy of Sciences, Engineering, and Medicine may be a logical body to 

undertake the task of conducting a detailed study. The Academies bring a breadth of 

disciplines and natural synergy with the topic of space by virtue of their role with NASA 

in performing the Decadal Surveys as overseen by the Space Studies Board12 - particularly 

those focused on planetary science. Additional expertise resides in the Aeronautics and 

10 Ibid, pg. 360.

11 Office of Fossil Energy, “About the SPR,” Energy.gov, https://www.energy.gov/fe/services/petroleumreserves/strategic-petroleum-reserve 12 Space Studies Board of the National Academies of Sciences, Engineering and Medicine: The Decadal Surveys. 

https://sites.nationalacademies.org/SSB/SSB_052297
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Space Engineering Board and in their history of extensive study of human spaceflight 

topics.13

2) A comparable study by another entity such as the American Institute of Aeronautics and 

Astronautics, in cooperation with representatives from the commercial space, energy and 

investment industries, might be commissioned to fully examine a private sector approach 

to a strategic in-space propellent reserve. The two studies would then provide decisionmakers with a broader context in which legislation could be proposed to Congress.

3) Topics to be considered in these studies could include the following:

● The advantages and disadvantages to a government reserve versus a non-government 

commercial reserve;

● The location and size of reserves required to stimulate and sustain economic growth;

● Required technical means to develop, build, and provision the reserves – to include 

assessment of the viability and timeline for in-situ propellant manufacture;

● Connection logistics standards, e.g. development of international standards for 

equipment needed access to and transfer of fuel;

● Transport and storage of propellant from Earth; 

● Identification and characterization of potential markets, with an understanding that 

nascent markets may be difficult to model;

● National security implications and requirements, including impacts of a reserve upon 

both ‘hard’ and ‘soft’ security concerns; 

● The investment required, modeled in light of the aforementioned variables; and

● Potential funding models.

Reviewer Comment

The following comment was provided by a member of the UAG upon review of this paper. 

(1) I would suggest that we might want to reach back to the historical analogy of "water stops" 

along the transcontinental railroad system when steam trains were mostly used. These tanks 

were positioned so that the steam locomotives could fill up with their "fuel," which was then 

converted into steam through the burning of coal, thus converting that marvelous plant-based 

fossil fuel into energy in yet another amazing way. https://en.wikipedia.org/wiki/Water_stop

Maybe rather than the last sentence of the first paragraph under "In Space Propellant Reserve," 

we could include this historical analogy by saying:

“An historical analogy might be made in terms of the age of steam locomotives. Water tanks 

were stationed along railroad tracks to provide water for steam so that trains, otherwise limited 

in range, could travel across vast distances. Similarly, space-based water or other propellant 

13 See for example, “Pathways to Exploration”, 2014. https://www.nap.edu/resource/18801/deps_088247.pdf
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storage tanks strategically placed would put the solar system within reach. Such platforms 

would also facilitate the aforementioned functions and enable three key outcomes."

The content of this paper reflects the thoughts and opinions of the subcommittee’s 

authors, and should not be construed as a recommendation of the full National Space 

Council Users’ Advisory Group or the official policy of the United States Government, 

the National Space Council, or the National Aeronautics and Space Administration