Ride the Space Elevator to Riches!

Remember the space elevator idea? It involved a science-fiction-style human construction made out of carbon nanotubes, leading to a space station in geosynchronous orbit and allowing us to launch satellites or do research of an orbital nature much faster and cheaper than with the rockets and space shuttles used today.

There hasn't been much talk about that elevator in recent years, but that might change. Carbon nanotubes are growing up and moving from research labs to real-world business. This week, pharmaceutical giant Bayer opened a manufacturing plant that can churn out 200 tons of nanotubes a year. According to Bayer, it's the world's largest nanotube factory in an industry that the company boldly proclaims will hit $2 billion in sales within 10 years.

Personally, I believe Bayer is playing lowball. The tubes are light but still extremely strong, can act as electrical conductors or semiconductors, and even come with unique optical properties. Potential uses for nanotubes include structural engineering marvels like the space elevator, and hyper-efficient display screens that would put the finest OLEDs from Universal Display (Nasdaq: PANL  ) to shame. If the Bayer plant is the starting gun for large-scale manufacturing investments, this market should hit $2 billion long before the next decade.

Bayer is known for medical research, but also runs a couple of sizable materials divisions. The particular type of nanotubes to be made in this new facility are intended for hard, antistatic, and non-stick coatings for ship hulls and sporting equipment, among other things. However, nanotubes could also deliver benefits to such disparate areas as medicine -- Bayer trumpets their effectiveness in areas such as diagnosis and therapy. Elan (NYSE: ELN  ) has a nanoscale drug delivery system, for example, though it doesn't actually use tubes.

Though nanotubes have always existed, revelations about their use in industrial processes are pretty recent, and manufacturing them is still difficult and expensive, not to mention rare. However, the researchers in the field include giants like IBM (NYSE: IBM  ) , General Electric (NYSE: GE  ) , and Hewlett-Packard (NYSE: HPQ  ) , besides legions of tiny independents.

That elevator might still be decades off, but carbon nanotubes are getting ready for prime time. Is this the magic moment for nanotechnology venture capital firm Harris & Harris (Nasdaq: TINY  ) ? The VC invests in private companies such as Nantero, which recently tested a carbon nanotube-based memory device jointly with Lockheed Martin (NYSE: LMT  ) .

I think this could be Harris & Harris's time. Share your own thoughts, big or small, in the comment box below.

Fool contributor Anders Bylund owns shares in Elan and Universal Display, but he holds no other position in any of the companies discussed here. Elan, Universal Display, and Harris & Harris Group are Motley Fool Rule Breakers recommendations, of course. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (4) | Recommend This Article (10)

Comments from our Foolish Readers

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  • Report this Comment On February 03, 2010, at 4:08 PM, blesto wrote:

    There is a competition for tether strength for the space elevator. A $1.1M prize sponsered by NASA.

    http://www.spaceelevatorgames.org/

    Other competitions and info at this blog;

    http://www.spaceelevatorblog.com/?cat=4

    Also

    To date, Carbon Nanotube microfibers of a specific strength of 10 N/Tex have been produced, as have aligned carbon nanotube forests of lengths over 1 mm. It was recently shown that a Space Elevator can be built with a tether only 35-40 N/Tex strong. The required length for individual fibers is only in the cm range. The gap is quickly getting smaller.

    http://www.isec.info/welcome

    It will one day be a reality and I am looking for a real investment opportunity.

  • Report this Comment On February 03, 2010, at 5:09 PM, blesto wrote:

    In order to encourage CNT(Carbon Nano Tube) laboratories to pay more attention to the Space Elevator (CNTs hold tremendous potential in other fields as well) we have posted an open dare to industry and academia: We will award a total of $900k this year, provided by NASA, to the teams that can come up with the best Space Elevator tether sample, provided that they can beat the best commercial tether on the market by a factor of 2 (approx 1 ton). Another $1.1M will be awarded to any team that can beat it by another factor of 1.5

    http://www.spaceward.org/elevator2010-ts

    It would be a dream come true if a company like GE were to participate.

    If not, some other compamy that is able to achieve this milestone could possibly become a "RuleBreaker" type of investment.

    If it turns out to be some privately owned company, hopefully they are financed by a venture capital firm like Harris & Harris(TINY) so investors like me can have an opportunity to participate in this potential economic gorrila in orbit and into the solar system.

    I can see mining the asteroid belt. Who knows what type of valuable commodities can be found there?

    The space elevator is only the first step.

  • Report this Comment On February 03, 2010, at 5:13 PM, sid2286 wrote:

    I'll be honest... I clicked on this story just because of the title. And I learned something. Nicely done Fool, nicely done.

  • Report this Comment On February 10, 2010, at 12:13 PM, woo131 wrote:

    Many are getting tired of the pie in the sky thinking demonstrated by this foolish article. TINYs day may or may not be coming. Meanwhile they pay themselves well to invest in companies that so far are not going anywhere.

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