Economic parameters are identified for an in-space industry where the capital
is made on one planet, it is transported to and teleoperated on a second
planet, and the product is transported off the second planet for consumption.
This framework is used to model the long-run cost of lunar propellant
production to help answer whether it is commercially competitive against
propellant launched from Earth. The prior techno-economic analyses (TEAs) of
lunar propellant production had disagreed over this. The "gear ratio on cost"
for capital transport, G, and the production mass ratio of the capital, phi,
are identified as the most important factors determining competitiveness. The
prior TEAs are examined for how they handled these two metrics. This identifies
crucial mistakes in some of the TEAs: choosing transportation architectures
with high G, and neglecting to make choices for the capital that could achieve
adequate phi. The tent sublimation technology has a value of phi that is an
order of magnitude better than the threshold for competitiveness even in low
Earth orbit (LEO). The strip mining technology is closer to the threshold, but
technological improvements plus several years of operating experience will
improve its competitiveness, according to the model. Objections from members of
the aerospace community are discussed, especially the question whether the
technology can attain adequate reliability in the lunar environment. The
results suggest that lunar propellant production will be commercially viable
and that it should lower the cost of doing everything else in space.