Clark Lindsey touched some nerves at Hobbyspace with his post on flights at $100/lb.

I think we all agree that costs are high now and that in some rosy future with high demand, mass production, high utilization rates, R&D amortized over many units, continuous improvement from families of commercial rockets developed by the same team and other kinds of standard obtanium can get the price down to some single digit multiple of the fuel cost. It probably won’t be 3 like aircraft, but even if it’s 9, that’s only $180/lb at current fuel prices.

The questions are, “How?” and “How soon?” There are a variety of ways to increase utilization. The one economists favor is firms that can’t cover costs going out of business so that the ones that can increase their utilization. For that, we need to get all the governments out of the subsidized rocket business. Another is to really grow demand. I am working on that one.

For “How soon?”, we appear to be a factor of 20 away from $100/lb. If Elon makes $500/lb by 2010 then we will be a factor of 5 away. If improvements continue at that pace, we might see $100/lb in 2015. Others will say we won’t see those prices for 300 years. The latter seems moot to me. At $500/lb, that
is $100,000 to deliver 200lbs to orbit. That looks to me like a price point that would support millions of tourists even if no further improvements in technology are made. Of course, millions of tourists is inconsistent with low utilization and low flight rates that are required to justify high capital costs. (If you throw in ejections seats, non-recyclables and so on, you can still get a week in orbit for much less than the millions that is the current conventional wisdom for the early retail prices).

There is the possibility of a disruptive technology getting us to skip to an interesting future. E.g., a space elevator at $100/lb. would grow demand for rocket propulsion at geo-synch, on the Moon, in LEO, lunar orbit and lots of other places that become accessible for a cheap outgoing trip.