Category Archives: Economics

Business, Economics, Space

Rockets For Sale

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John Carmack mentioned this at the conference a week and a half ago, but I don’t think I reported it, at least not in any detail. Armadillo is willing to sell vehicles to anyone who wants to fly them (presumably subject to ITAR restrictions):

The way to look at it is as a “rocket trainer”, rather than a vehicle that can perform any kind of real lunar or suborbital mission. We don’t pretend that the vehicles could actually land on the moon, but if you want to hack on a real, flying system, there is a lot of value to be had.

The price is $500k. The experience of the Lunar Lander Challenge shows quite clearly that you aren’t likely to do it yourself for less, even if you spend a couple years at it. Several intelligent and competent people thought otherwise, and have been proven incorrect.

You can have either a module or a quad, at your choice. The quad has more hover duration, but it is more of a hassle to operate. A module could be fulfilled right now, a quad would take about three months to build, since we are still planning on using Pixel for LLC this year and other tasks. The engine will be one of our new film cooled stainless chambers, and we will warrant it for ten flights. If it blows up or burns through in that time frame, we will replace it. We will not replace the vehicle if it crashes, but historically our engine problems have been visible at startup, and you should have an opportunity to abort the flight. Ground support equipment is included, except for the lox dewar(s), which would be specific to your local lox vendor. We will test the vehicle ourselves, then train your crew to operate it. You get copies of our experimental permit applications and information about the insurance policies we use for permitted flights. Details on modifications to the flight control software are negotiable.

If he got a big order, or multiple customers who wanted delivery ASAP, I wonder how he’d respond? Would he ramp up production (with the intrinsic risks to quality), or keep supply constant and crank up the price? As I’ve said for a long time, at some point this is going to have to transition from a hobby to a business for him, and it seems to me that this has the potential to force that decision, if he has a significant number of takers.

I also wonder how much new engines will cost, assuming that they’re only good for ten flights (he doesn’t say that, but it’s all he’s willing to warrant them for). Let’s say that the engines are half the cost of the vehicle. That would mean a cost of $25K a flight to amortize the engines, which is a lot more than propellant costs. It seems to me that if he only thinks that he can get ten flights, engine life is where his emphasis needs to be for reducing operating costs. It’s also hard to see how he can charge the same amount for a module as a quad, since the latter has four engines in it. I’d really like to understand more about this proposition.

He follows up the offer with his assessment of the industry (and his competition), but I’ll save my thoughts on that for another post.

Business, Economics, Political Commentary, Technology and Society

No Peak Oil?

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If this is true, it’s a huge story. It certainly seems plausible. I’ve always claimed that oil reserves are driven much more by technology advances than by consumption rate:

n the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel.

It was not until 2007, when EOG Resources of Texas started a frenzy when they drilled a single well in Parshal N.D. that is expected to yield 700,000 barrels of oil that real excitement and money started to flow in North Dakota. Marathon Oil is investing $1.5 billion and drilling 300 new wells in what is expected to be one of the greatest booms in Oil discovery since Oil was discovered in Saudi Arabia in 1938.

It’s also a story that will enrage those who want us to tighten up our hair shirts.

Economics, Philosophy, Political Commentary

Another Strike Against Him

17 Comments

Why is Barack Obama against drug legalization?

I’m running through the issues, and I can’t find a single one on which I agree with him, other than that blacks should take more responsibility for their own lives.

That’s great but, sorry, it’s just not enough. Just another non-federalist fascist.

This comment probably explains his position:

The only black dude and admitted former drug experimenter in the race cannot afford to look soft on drugs.

Yup. New politics.

Can someone pass the Kool-Aid?

Business, Economics, Political Commentary, Space

Irrational

9 Comments

Mike Griffin is worried about losing a Shuttle crew if the program is extended:

“Given that our inherent risk assessment of flying any shuttle mission is about a 1-in-75 fatality risk, if you were to fly 10 more flights, you would have a very substantial risk of losing a crew. I don’t want to do that.”

If we accept his risk number, that translates into a 13% chance over ten flights. That doesn’t seem “substantial” to me. There are a lot of good reasons to not extend the program, but risk of crew loss isn’t one of them. I’m sure that most of the astronauts would be happy to take the risk, and the real loss wouldn’t be astronauts (of whom we have a large oversupply), but the loss of another orbiter, which would almost certainly end the program, because they probably couldn’t manage with only two left. If what they’re doing is important enough to risk an orbiter, that is almost literally irreplaceable, it’s surely important enough to risk crew, who are all volunteers, and fully informed of the risk.

When I was watching coverage of the cranewreck in Manhattan yesterday, they cited a statistic from the Bureau of Labor statistics that there were forty-three construction deaths last year (I think in New York alone). Can someone explain to me why is it acceptable to kill construction workers, but not astronauts?

On the other hand, here’s one thing that I do agree with Mike on: the last thing we need is another space race.

Administrative, Economics, Technology and Society

Busy

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The next house project (not counting landscaping, which we may be hiring someone to do) is molding, both replacing base and installing crown. It was a nice excuse to go out and buy a nice Craftsman 10″ compound dual-bevel laser miter saw, because Sears was having a sale. I thought about getting a 12 inch, because it wasn’t that much more, but it took up more room, and the blades were a lot more (though with carbide, it might have been a one-time purchase, given my low usage level). And I couldn’t really justify it–the ten-inch will do just fine for almost anything I need to do in terms of beveling or mitering. If I need to bevel bigger things, a table saw will do the job. I guess I’m not Tim the Tool Man, even though I am from southeast Michigan.

I continue to be amazed at how low cost good tools have become–particularly tools (and power tools) that didn’t even exist when I was a kid. I suspect that this isn’t factored into inflation much, but it really does add to the national wealth when people can improve their productivity at little cost. In California in the nineties, I did some base molding with nothing but a circular saw, but it was a pain in the ass, and I’m sure that this will do a much better job. Anyway, if blogging seems light, that will be one of the reasons.

Business, Economics, Political Commentary

The Problem With Health Insurance

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It’s not insurance.

Nothing new here to people familiar with the situation, but many don’t seem to understand the problem. But this is the origin of it:

Health insurance started to change, though, during the Truman administration. (I hasten to mention that I wasn’t actually there: I was born during the Eisenhower administration, when the process had only gotten started.) Truman wanted to implement the progressive new notion of a national health care plan, but couldn’t get it through; at the same time, post-war wage controls were still on, so employers bidding for new workers had to find other ways to compete.

Through a sequence of compromises, what came out of it was a system in which companies and only companies could buy health insurance and health care for their employees, and deduct the cost as a business expense. My father’s music store and the steel mill across town could buy health insurance, basically, at a discount. (My uncle the butcher couldn’t; he wasn’t a “business.”)

Years pass. (Insert visual of wind-blown calendar leaves here.) Medical care becomes more complicated, legal conditions change, and a lot of things that used to be major medical issues that mostly affected the life insurance rates become things that could be cured, or at least managed. Increasingly, what was “major medical” insurance became, simply, health insurance; we expected the insurance companies not just to pay for unexpected events, but for the normal sort of day-to-day maintenance we all need.

People will pay to repair their car, or their pets, or appliances out of pocket, but somehow, over the past decades they’ve come to believe that it’s a fundamental human right to have someone else pay for your doctor visits. Until we cut off this disastrous government policy of tying health insurance to employment, and allow everyone to deduct medical expenses on a level playing field, and get people to understand that we have to return to the model of health insurance the problem will not be solved.