Understanding the make-buy question in a growing Mars city

Part of the series on space stuff.

It is a good intellectual exercise to create an intuitive diagram to communicate new ideas in a compact, succinct way. Edward Tufte has written the same book several times on the topic, which is a must read for anyone who wants to learn how to effectively communicate knowledge.

Some time ago I created a diagram to understand how Mars autarky would progress from local manufacturing of bulk goods to more complex parts. It was not a good diagram and upon revisiting it even I found it confusing. I’m revisiting the topic here to have another go and to help future readers, including me, get quantitative on this subject.

There are three intuitions which underlie this discussion.

  1. Modern supply chains are incredibly complex, with millions of components shuttling between millions of factories without centralized control.
  2. For the most part, we use a lot of cheap things and fewer expensive things. Since cheap things are generally easier to make (which is why they’re cheap), a Mars city relying heavily on extremely expensive interplanetary cargo importation would strongly prefer to localize production of cheap, readily available raw materials. For example, water and undifferentiated crushed rocks are absolute necessities for local production, while specialized pharmaceuticals and high performance integrated circuits will never dominate a cargo manifest ranked by weight.
  3. The competitiveness of local manufacturing depends on several factors. Robust local demand and growing industrial sophistication tend to favor local production, while improving Starship technology, cargo carrier competition, and increased cargo volumes drive down shipping costs, favoring importation. It is difficult to say which factor will dominate when, but I think it is safe to assume that ramping up production of Starships on Earth will almost always be easier than ramping up production of advanced factories on Mars.

A less terrible version of the diagram is given below.

Bigger version.

The diagram shows a mix of industrial sectors (eg all steel) and also particular products as representatives of entire sectors (beyond burger for highly processed food). These products are graphed according to their annual per capita consumption (horizontal axis) and annual per capita cost (vertical axis). On the far right we have water, which is incredibly cheap despite us using far more of it than anything else. As we trend to the left, we traverse steadily more sophisticated products with higher unit costs and lower production volumes.

On Mars, manufacturing costs will be higher and consumption patterns quite different. In particular, Mars production requires enormous quantities of methane and oxygen to refuel Starships flying back to Earth, as well as the local production of materials which are scarce on Mars but common on Earth, such as nitrogen. These are shown in the modified graph below.

Embiggen.

This graph shows all the same commodities with Mars consumption and production cost modified by several educated guesses. A city attempting industrial closure with a small number of people must have extremely high per capita productivity, at least by Earth standards. This implies a higher per capita production cost and consumption. In addition, basic raw materials are also consumed at much higher rates and costs in order to fuel both industry and Starships.

Despite these larger numbers, local production of raw materials still costs less than $100/kg, which is less than they could ever cost to import even if Starships were free. This suggests that even in a future where Starship is able to deliver cargo to the surface of Mars for 20x less than Falcon can deliver to LEO today, local production is still favored.

Finally, let’s take a look at the same graph, but with costs determined by import, at a base rate of $200/kg. $200/kg is extremely ambitious but not physically impossible.

Bigger version.

At $200/kg, the cost of nearly every import falls on the green diagonal, indicating that importation is the major cost driver. Indeed, very few commodities have higher unit prices than this. This is the main reason that space mining for Earth markets is unlikely to take off.

Combining all three graphs into one slightly crowded one shows the relationships between different sources of commodities for a growing Mars city.

Bigger version.

The first thing to notice is that the per capita costs for basic raw materials such as rubble, oxygen, methane, and water, are beyond ridiculous in an import scenario. For industrial scale water consumption without recycling, annual water imports alone are about $10b/per capita.

In-situ resource utilization (ISRU) is absolutely mandatory from the very beginning for any material in the top right section of the graph, including nitrogen, concrete, oxygen, rubble, methane, and water. Fortunately, all of these materials are readily obtained almost anywhere on Mars, and many of them can be obtained via pipelines in non solid-phase. For crushed rocks, it is not necessary to find an ore body as the whole planet is made of rocks. Importantly, none of these materials will require incredibly sophisticated remotely operated robotic mining and refining equipment with science fiction capabilities.

Mars’ atmosphere provides limitless quantities of nitrogen and CO2, requiring only an intake, compressor, dust filter, and cryogenic distillation for separation. A subsurface water well (either into ice or an aquifer) provides water and, in turn all the hydrogen needed to synthesize methane (sound familiar?). Rubble can be processed from generic local regolith, and will be used in large volumes for thermal and radiation shielding, road building, cement, and masonry. This is notable distinct from, eg, titanium, which will require the discovery of concentrated ore somewhere, plus the creation of a local mining town to extract and refine the product before trucking it back to the city.

Finally, processing all these materials requires the local generation of electricity, either with large photovoltaic solar farms, or nuclear power plants. The power requirement will be around 10 kW/per capita. Because solar farms are essentially two dimensional, panels can be made extremely thin and light, with a per capita panel mass allocation of less than 100 kg.

Establishing a local supply chain for these generically available raw materials lowers the cost of marginal immigration to the point where it’s conceivably possible to operate a large outpost, similar in scope to McMurdo Station. Without further local production, annual per capita material imports would be around 10 T at a cost of $2m.

Cutting this mass requirement back by a few orders of magnitude would enable human immigrants to Mars to rise, as a fraction of the total mass flux, from about 0.1% to 20% or more, an increase of a factor of 200. If the McMurdo analog city housed 1200 people with synodic turnover of 400 every 26 months, roughly 180 Starships would be needed for resupply and perhaps just two or three for passenger transport. With the same 7 year tours of duty, the same sized Starship fleet could support a base with a population of over 100,000, if Mars-manufacture of basic commodities permitted the fleet to mostly carry people and their personal supplies. For reference, a fleet of 185 Starships would require roughly 500 launches per year for LEO refilling, and would cost about $7b/year to operate given launch costs of $10m and single trip cargo Starships costing $10m to produce. Under this paradigm, growing Starship production capacity could support a city of a million people for less than $70b/year, and that’s assuming everyone still comes home after a 7 year term of duty. If most migrants are traveling one way, net transport of 150,000 people to Mars every 26 months would require the production and launch of 400 Starships every launch window, at a total program cost of just $28b.

Even better, for commodities whose annual per capita consumption falls between roughly 10 kg and 10 T, moving production to Mars is enormously competitive and thus enormously profitable. While local production of eye-watering quantities of water, oxygen, methane, aggregate, and nitrogen is a basic necessity for any kind of viable Mars base, onshoring production of steel, food staples, plastics, fasteners, chemicals, glass, copper, and some textiles would drive the city’s economic engine of expansion. Completing this transition would lower per capita material imports from 10 T to perhaps 20 kg, reducing the cost of these commodities from $2m to around $100,000. The Mars city’s average GDP per capita will be at least 10x the US average today, meaning around $650,000. Import costs, while still substantial and unbalanced, will be less than 15% of total economic activity.

What about commodities with consumption below 10 kg/capita? For the most part, these are high specific cost items whose importation cost penalty is roughly the same as the Mars manufacturing difficulty penalty. That is, there is no strong economic reason to onshore production. There are non-economic, strategic reasons to onshore at least partial local production of 6502 processors or electric motors, but it’s unlikely to be wildly profitable without some kind of import tariff.

Indeed, a 4-9 month interplanetary voyage on Starship would require a few hundred kilograms of consumables per passenger, plus a personal luggage allocation of a similar size. So it is conceivable that each migrant could bring with them a lifetime supply of underwear, flash memory, and pharmaceuticals, without significantly affecting the per-passenger mass overhead. In other words, once ~80 kg people and their life support equipment become the dominant form of transported freight, extremely high value and low mass high tech and luxury items do not consume much marginal capacity.

While this analysis has been prepared using a Mars cargo transport cost of $200/kg, the results do not vary much even as this changes. Commodities split into three categories: raw material (local production mandatory), secondary commodities (local production profitable) and high tech/luxury goods (local production requires tariffs). The precise boundaries between these three categories do not even move much for a range of plausible shipping costs. Essentially anything that can be made from water, Mars atmosphere, or surface rocks must always be made locally. Anything simpler than textiles is profitable to produce on Mars. And anything requiring precision manufacturing is probably cheaper to import in bulk.

Let’s make this observation concrete.

Shipping costs can climb to $2000/kg, creating more of an economic driver to produce, eg, bearings and motors on Mars. Yet the per capita consumption is still around 10 kg/year, so the total local addressable market for local production is small while total importation costs are still quite low in the overall grand scheme.

Alternatively, shipping costs could fall to $10/kg. This would require several large miracles in Earth-based fuel costs and Starship production, and for what? Local oxygen production would become less compelling, but the city would still require 30 T/per capita annually, which would swamp the entire cargo manifest.

Fundamentally, any Mars city construction is going to cost a lot of money, essentially determined by the rate of Starship launches. The goal of the mission planners is to maximize the return on investment given by those several thousand cargo transport missions. Given some finite cargo capacity to maximize the rate and number of economically productive migrants, it will always be necessary to do massive scale Mars-based fuel ISRU production, along with related basic products. Once this exists, return flights and a population of thousands is possible. Their task is to diversify the local supply chain and build out the middle tranche of basic industrial commodities. But no matter how cheap Starships get, localizing production of, eg, computer chips will consume scarce labor without necessarily improving the migration rate.

Ultimately, a self-sustaining Mars city must be able to produce everything it needs locally. During the scaling phase, however, there will come a time when the make-buy decision is no longer strongly forced by prohibitively expensive transport costs.

23 thoughts on “Understanding the make-buy question in a growing Mars city

  1. Thinking long term, how would the advent of general purpose/general intelligence droids affect this picture? (Assuming Telsa can manufacture these in bulk before the end of the decade.)

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  2. “7 year tours of duty”

    It’s a colony. For most people, the tour of duty is “your remaining lifespan”. Which is not to say that might not work out to be about 7 years for the first wave of colonists… The round trip passengers will be special cases, such as paid passengers sent by government on round trips, and high value specialists willing to spend a limited time on Mars for very high pay. Thus we have to expect that there will be very little return traffic.

    Second, “Mars Needs Junkyards”; Suppose most Starship flights to Mars are one-way? It dramatically reduces the requirements for manufacturing fuel on Mars, while flooding the local market with stainless steel, and all the interior fittings. (Which could be deliberately designed for reuse; Running control systems on general purpose computers, for instance.) Raptor engines will likely be a bit of a drug on the market, of course, but are a nice source of some raw materials. But it might be better to dismount them and ship them back as cargo on the occasional return flight.

    Third, Mars will likely use a different mix of technologies than Earth, based on the need to rely on local materials while avoiding processes that only work efficiently at huge scale. You’re not easily going to set up an iron refinery on a planet lacking an oxygen atmosphere and fossil fuels, but you can make high performance polymers like Spectra out of nothing more than ‘air’ and water on Mars.

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  3. Could you make the data you plotted available? I have a couple of ideas for alternative visualisations I’d like to try out.

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  4. Putting a city on Mars before putting a city in Earth orbit really feels like putting the cart before the horse to me. Suppose you are making a city in orbit without agriculture. Your per capita annual material needs for a non-frontier standard of living are roughly:
    300 tons water
    1 ton oxygen
    2 tons concrete and other building materials
    2 ton foodstuffs
    2 tons everything else

    With large expandable space habitats the pressurized volume to hold all this could easily be less then one ton per capita for a pressurized volume that lasts decades, an afterthought in the “everything else” category.

    Water is obviously the big deal in the budget so effort should be made to get it down. It’s a large closed volume so it should be possible to recycle water much more efficiently then a small space vessel. If you get it down to just a couple tons of water and oxygen a year you’d be getting almost all you’d need in the food imports. At this point launch costs start mattering less then the costs of the goods imported. American per capita consumption expenditures are $64,000 a year. Of that %70 is spending on services so that’s roughly $20,000 of physical goods from the outside. The city would presumably be a net exporter of services (giant comparative advantage with the much larger population on earth).

    So the costs look something like:
    Water and air recycling: ~$10k?
    Cost of imported goods: ~$20k
    Services (both from earth and from the colony): ~$45k
    7 tons Launch costs @ $10/kg: $7000
    -1 ton water/oxygen
    -2 tons raw foodstuffs
    -2 tons concrete, steel, wood, etc.
    -2 tons other goods

    The local production decisions are way less urgent then on Mars. Substitution with a few of the less value dense materials (concrete, wood, steel) could be driven by launch costs but once you get to even moderately value dense stuff like foodstuffs you’d need to bring the cost of off world production down to roughly the cost and quality of terrestrial production to justify substitution.

    I see something like this as much easier to sustain then Mars. Compared to living Earthside it’s only an extra $17k a year. That would be doable with even a small percentage of the population working in R+D and entertainment industries that take advantage of the zero-g. There would also be savings from efficiencies in electricity production and no land scarcity impacting housing prices. The real estate savings could potentially offset most or all of the costs of living in space. That cheap electricity would make it a good place to locate server farms. It’s not an outpost of researchers like McMurdo; it’s a city with a slightly more productive workforce like Minneapolis with room for yoga instructors and baristas. It might cost a trillion dollars to get something like this to scale but once that investment is made the investment would be profitable.

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      1. Isn’t the main service any space habitat exports the bare fact that it is in space? That is, for example, lots of people live in large expensive cities because they prefer them to alternatives that are cheaper. Same would certainly go for a space city in earth orbit, on the moon, or on Mars. People would pay (perhaps much) more to live there than in some other cheaper place mostly for the “service” of living there.

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      2. “Plenty of cities have shrunk after their productive industry went away”

        Indeed, people often fail to understand that cities arise where they do for reasons, and when those reasons go away, typically so does the city. Common reasons for locations of cities:

        Local resource extraction/exploitation. Mining, agriculture, fishing, and tourism.

        Intersections of trade routes, or changes of transportation modes. Ports, essentially, or crossroads.

        Industry, but that usually arises after a city has already formed for one of the prior two reasons, and fades if that reason goes away, because industry seldom has to be in a specific place.

        More recently, regulatory advantage: Think Las Vegas/Reno. Lousy locations, the only reason you have cities there is that the government permits activities there that are suppressed elsewhere.

        Sometimes political clout will produce subsidized cities, but they tend to be more zombie cities than viable.

        Now, what does Mars have to offer? It’s obviously not on any trade routes, and in space trade routes aren’t much of a concept anyway. It has resources, but none that are valuable enough to justify shipping them back to Earth. (Maybe scientific samples, for a while.)

        It DOES have the fact that it’s Mars, of course, and if even a tiny, tiny fraction of Earth’s billions value being on Mars, that may be enough to get the ball rolling. If it reaches self-sufficiency, it doesn’t need a reason for existing relative to Earth.

        But I think the real potential is in the area of regulatory advantage: All the things you might be able to get away with doing on Mars that are heavily suppressed on Earth. Germ line genetic engineering, nuclear research, odd social arrangements, (Given current trends, heterosexual monogamy?) religions, political experiments.

        Some of those things motivated colonization of North America.

        But, are cities even the right question? Not everybody lives in cities, and cities have, historically, been population sinks, not sources: Where you’d go to do interesting stuff while failing to reproduce above replacement! Indeed, it could be that the current birth dearth is a result of urbanization becoming sufficiently dominant to impose anti-natal values on all of society.

        Probably not good for a lifeboat colony to have sub-replacement birthrates. I think Musk should probably aim, not for a “city”, but a more dispersed form of settlement.

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  5. If the market is too small to justify making many high-value, low-mass products on Mars, maybe the solution is to change how they are manufactured. Rather than having a dedicated machine for making each specialized, precision part, just make them all with the same 3D printer. The manufacturing cost will be significantly higher than on Earth, but still cheaper than the shipping costs. I imagine that the same principle applies to making integrated circuits. Design the machine to allow quickly switching between different chips, rather than designing for speed or efficiency.

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    1. If we could do that on Mars, we would already be doing that on earth. There are a few places where that is being done (3-D printed machinery) but for most applications it’s just prohibitively capital and labor intensive.

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  6. Great update! Any idea how much is too much when it comes to human time spent detaching-packing-loading raptors to ship back to Earth? Seems like a good way to think about labour cost and working conditions on each planet.

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    1. It is hard to imagine that if there was a shortage of Raptors at the end of the production line in a factory on Earth that the easiest and cheapest way to fix it would be to import some used ones from Mars.

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      1. It’s less that I think it makes sense to ship the Raptors back, as it’s about the only thing besides scientific samples and the rare return passenger that might make sense to send back.

        Essentially the whole Starship aside from the engines is going to be high value parts and materials that you could use on Mars, and even the raptors might be more valuable for their material content than as engines.

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  7. Both fair points. I was thinking of it as a thought experiment. Now it seems likly a calculation would more reflect the assumptions in the estimates than inform about the value of a human minute on Mars.

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  8. I’ve been pessimistic about medium- to long-distance transport being worthwhile on Mars, because I suspect that abrasive dust will be a much greater source of wear-and-tear on machinery than it is on our warm, moist planet. But I like the idea of pipelines. If titanium is much easier to extract in one place than another, it might be worth setting up an outpost and piping titanium chloride in liquid water. Likewise for various other metals as cations, and for phosphate and sulfate. I think most work will be done by remotely-operated semi-autonomous machinery, so that humans will need to be within a reasonable light-speed lag but not directly on-site. Of course, I may be wrong about many implicit assumptions, such as how easy it is to insulate a pipe well enough to keep water liquid for many kilometers.

    I’m still guessing that it will mostly be better to process ordinary rock into differentiated materials, rather than leaving it as crushed whole rock. I’m fairly optimistic about how easy it is to get various metals from ordinary rock. On Earth, we have lots of kinds of ore and we have rivers and oceans that give us virtually frictionless transport on infrastructure that just exists without us having to do anything. So of course we mine ore, and we would even if processing of ordinary whole rock into multiple useful materials were orders of magnitude easier than even I am guessing it will be.

    I’m also optimistic about the price, mass, and versatility of machinery for precision manufacturing, compared to the cost of transport to Mars, compared to the cost of producing mid-tier bulk materials on Mars, and compared to the difficulty of anticipating exactly what the Martians will need and want for the time from one launch window to the next. So I expect anything that can be precision-machined from basic materials to be made on Mars almost from the very beginning. Engineering and design, after all, are information, which can be shipped to Mars in minutes at essentially zero cost.

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