I don't think overhead is charged on fuel, though. I believe overhead is
charged on services, not inventory. So perhaps the proper
accounting/costing would be different than a typical government contract.
On Thu, Aug 29, 2019, 11:23 AM William Claybaugh <wclaybaugh2@xxxxxxxxx>
wrote:
Peter:
Sorry, the 100% of cost of goods sold is a very generous estimate of G&A,
Overhead, and profit. These more commonly run around 20-25%, 110%, and
10%, respectively
On Thu, Aug 29, 2019 at 3:18 PM Peter Fairbrother <peter@xxxxxxxxxx>
wrote:
On 25/08/2019 18:13, William Claybaugh wrote:
Rand:
To first order, the cost is the cost of launch ($1300 for every
pound-mass) plus the cost of the hardware (say $200 per lbm. if it is
the very cheapest space hardware ever built): $1500 for every pound of
structure in orbit, best case today.
Okay.
The only other economically relevant numbers are the amortization and
depreciation schedules; the later should be consistent w/ the facility
lifetime (ten years?) and the former a function of one’s hurdle
rate...say five years for most commercial projects.
What’s it weigh? 100,000 pounds of structure to hold 500,000 pounds of
propellant? Then $150m to be paid back over five years and another
$150m paid back over ten years.
Okay.
Now comes the back breaker: no one is buying any propellant becausethat
$300m is additive to what propellant can be bought for inside an upper
stage in LEO.
But let’s assume we are somehow flogging all 500,000 lbsm. every year.
Wooooah, now where does that figure come from? Why should it sell its
capacity annually?
Let's try 2,500,000 lb annually. That is 5 times capacity, 50 x 50,000lb
Falcon loads, one a week.
A significant increase in present flight rate, but perhaps not
inappropriate if we are talking about developing regular flights to the
Moon, Mars - or even just greater use of GEO.
And it's nowhere near what we would need if we are talking about
building power satellites and solving the energy crisis and saving the
planet...
Then the additional cost—above the cost of launching that propellant in
the first place—is about $150 per lbm. of propellant. That gets us to
the “cost of goods sold” in the income statement: $1450 for every
pound-mass of propellant sold assuming we are buying at $1300.
With the revised sales figure, the extra cost is $30 per lb. But I'd add
another $30 per lb (pulled rather arbitrarily out of the air) for depot
operating costs.
Now we add overhead and profit, typically 100% in a very well run
organization; our propellant has to sell for about $2900 per lbm. using
very optimistic assumptions.
Costing the propellent at 100% of sales makes the cost of propellent at
the station $2,720. And I doubt anyone would pay that for a full Falcon
load, though they might pay close to that for a fractional load [1] if
they had no-one to share a full load with and assuming it is convenient
to fill up at a depot.
But let's look at a petrol filling station (or cigarette shop). Profits
on petrol are often only about 5% of sales, sometimes less - not 100%.
So if instead we cost in the profit at 100% profit on investment cost,
plus 5% of sales (twice what a terrestrial filling station gets),
propellent costs are now $1,485 in a depot rather than $1,300 in a
second stage.
And you can fill up with ten second stage loads worth all at once in a
depot, rather than fapping about chasing after ten Falcon second stages.
Or buy one and a half Falcon loads without wasting half a Falcon launch.
And you don't need all the hardware for in-orbit catching of Falcons and
refuelling from them on your mission hardware, the station does most of
that for you.
Also, I'd guess some larger frequent customers might just pay the depot
$120 per lb to collect, store and distribute their propellent. Which
would give the depot a simple 100% ROI.
[1] a note on half/fractional loads - I did not envisage the depot
buying them at anything above full load rate. I also envisaged perhaps
someone wanting a half load paying for a full load, then selling the
remainder to the depot at a discount. Or someone wanting a quarter load
just buying it from the depot rather than bothering with a dedicated
separate Falcon launch.
The depot is, of course, called "Halfway" :)
-- Peter Fairbrother
