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How to Make Rocket Fuel on the Moon
(And the Space Resources Tech Being Built in Colorado to Make It Happen)
John Himes
November 2, 2025
Founder @ Dynamic Tech Media
In today’s space economy, there’s real demand for in-space refueling. This demand for energy is the driving force for establishing a lunar economy.
In order to create and sell a product to meet that demand—rocket fuel that’s manufactured on the lunar surface—a series of technologies will need to be developed and deployed. The value chain must then be integrated to function in lockstep.
In this article, we’ll break down the steps to creating rocket fuel on the Moon, discuss the technologies involved, and highlight some of the key innovations being built in Colorado.
Why Make Rocket Fuel on the Moon?
In April 2025, DARPA issued a program solicitation for a lunar orbiter to prospect for water ice, which is the raw material for propellant. Just a few months later, NASA contracted with private industry to refuel US Space Force satellites in geostationary (GEO) orbit.
The reason we’re seeing this activity comes down to economics. A mission can only carry so much fuel, and that constrains its lifespan. If the hardware is valuable enough, in-orbit refueling is a better deal than commissioning a new project.
However, at least in theory, getting fuel into space is more expensive in the long run than manufacturing it on the Moon would be. This is because breaking free of Earth’s gravity requires tons of fuel—more fuel, in fact, than the amount such a mission could deliver. Since the Moon’s gravitational field is weaker than Earth’s, it takes less fuel for spacecraft to reach an escape velocity from the lunar surface.
Ultimately, if the money saved is greater than the cost of creating propellant on the Moon, it will be more cost-effective to refuel spacecraft with lunar-derived fuel than it would be to send fuel from Earth.
In Search of Cheaper Delta-V
In the case of the manned lunar landings planned for NASA’s Artemis program, the current estimate is that it would take approximately 10 refueling launches of SpaceX Starship vehicles to provide enough fuel for a single mission.
SpaceX’s technical difficulties aside, even with no setbacks it would still be expensive enough that lunar-derived propellant would be a cost-effective alternative. That’s not to say it would be cheap—lunar-derived propellant must still be valuable enough for private industry to invest in bootstrapping this capability.
Another facet of this, according to Dr. Chris Dreyer, Director of Engineering at the Center for Space Resources at Colorado School of Mines, is that if missions can count on in-space refueling, “then rockets can launch more payload. Every little bit of mass you launch means you have to have more propellant to launch that mass.”
Therefore, since it would require both carrying less fuel for the mission and burning less fuel to launch that mass, missions could pack more valuable cargo: people, instrumentation, industrial equipment, etc.
From there, says Dreyer, “once you can create propellant in space, you start thinking of other things you can do that you wouldn’t even conceive of, like in-space manufacturing of larger space station modules and bigger space telescopes.”
Furthermore, for missions that are farther afield, such as Mars or beyond, supplying a spacecraft with more fuel than it can carry from Earth isn’t just an advantage; it’s a necessity. This is a key element of NASA’s Gateway mission, a space station in cislunar orbit that will, as the name implies, serve as the gateway for humanity’s exploration of the cosmos.
If the commercial space industry can provide Gateway with lunar-derived propellant at a lower price than current terrestrial sources, it has the potential to become the space gas station we will need in order to realize our ambitions of becoming a spacefaring civilization.
What Technology Needs to Be Developed to Create Rocket Propellant on the Moon?
With an economic incentive driven by demand for a product, both private industry and public agencies are pushing to develop a technological value chain that can manufacture propellant on the Moon and deliver it to customers.
A major challenge is that many technologies need to be developed independently and then integrated in order to harvest raw materials and turn them into fuel. Even to get to that point, a substantial infrastructure layer needs to be established.
It’s impossible for us to detail every tech involved, and the eventual deployment would certainly look different anyway. But we’re going to lay out, in broad strokes, a step-by-step process for how to create rocket fuel on the Moon and what technologies need to go into each step.
The following is based in large part on the Commercial Lunar Propellant Architecture, a study authored by a collaborative of leading academic and private sector experts.
Step 1: Establishing Infrastructure for a Lunar Economy
Before excavation or resource processing can begin, several pieces first need to fall into place. This infrastructure layer will serve as the basis for the entire lunar economy.
To start, we need transportation to the Moon. In Colorado, ispace-U.S. is developing their 300-kg-payload-capacity APEX Lunar Lander in conjunction with their counterparts in Tokyo and Luxembourg. More broadly, they are joined by Firefly Aerospace and Intuitive Machines in the lunar vehicle market.
Another essential element is lunar communications, both among cislunar spacecraft and between those vessels and Earth. Advanced Space, a scale-up company based in Westminster, Colorado, is leading this charge with their CAPSTONE satellite, the first commercial lunar orbiter. Its suite of communication arrays is testing both Earth-to-satellite communications and peer-to-peer communications between lunar orbiters.
Timing and clock synchronization will also be crucial, especially for autonomous systems. We may see satellite-based quantum networking solutions like the one being built by Xairos in Lafayette, Colorado, play a role.
In September 2025, NASA awarded Solstar Space an SBIR grant to develop lunar Wi-Fi, while the agency’s LunaNet architecture more broadly seeks to establish and expand network capabilities on the Moon.
In the meantime, without access to GPS satellites, spacecraft and other systems will need a reliable alternative for position, navigation, and timing (PNT). This capability can be provided by quantum sensors, such as atomic clocks, that are being developed in Boulder, Colorado, by companies like Mesa Quantum.
Creating a Lunar Power Grid
Once on the lunar surface, everything requires power to run.
Creating a stable lunar electricity grid to provide juice to everything from robots to processing plants to human habitats is a major hurdle, and this prospect will itself require many technologies to come together. The current frontrunners for power generation are solar and nuclear technologies.
The Orbital Mining Corporation, featured in Dynamic Tech Media’s Colorado Tech Spotlight, is a spinout from the Space Resources program at Colorado School of Mines. They are creating power converters that are designed to withstand the harsh lunar environment in order to transport electricity from a solar farm to the point of consumption. In the case of landing sites, this needs to be at least 3 km away.
This infrastructure overview is far from exhaustive. We could drill down into individual components like propulsion modules, software systems for space situation awareness, batteries that are lightweight and resistant to radiation, and imaging that can prospect for water ice deposits. But for now, we’re simply taking a look at a small selection of the foundational tech that needs to be developed to create rocket fuel on the Moon.
Before we even get to the point where we can start moving regolith (lunar dirt), a lot of pieces need to fall into place. While this is a real challenge, we are seeing progress.
Although so much of this infrastructure development is ultimately motivated by customers who want to pay for in-space refueling, putting it into place will serve as the bedrock for all future lunar economic development.
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Step 2: Prospecting for Water
A series of remote sensing missions to the Moon has shown significant water ice deposits (around 5% mass by volume) at the North and South Poles in craters that are permanently shadowed.
Although these permanently shadowed regions (PSRs) bring a new set of technical challenges, such as exploring and operating in permanent darkness and extreme cold, it’s these same harsh conditions that trap ice and other frozen volatiles like carbon dioxide and ammonia.
While the DARPA prospector orbiter solicitation discussed above seeks to “cover the entire lunar surface in no more than four years, identifying all regions where subsurface water ice concentrations are at least 5%,” at a certain point prospecting will need to happen on the ground.
According to Dr. Paul Spudis, Senior Staff Scientist at the Lunar and Planetary Institute, a prospecting rover instrument package might include these modules:
- Drill or mole to obtain subsurface samples
- Sample handler and packaging for analysis
- Gas chromatograph/mass spectrometer
- Oven to bake regolith and watch evolved gas release
- Neutron spectrometer
- Imaging light detection and radar (LIDAR)
- Multispectral imager with artificial illumination
Many of these components, including a drilling and sampling system, are being developed in Longmont, Colorado, by Honeybee Robotics, a subsidiary of Blue Origin.
Step 3: Lunar Mining Operations
Once a water deposit is identified, it needs to be extracted. One concept, also developed by Honeybee Robotics, involves using a rover-mounted drill.
“These systems drill into H20-bearing regolith, heating it directly within the borehole or just above the surface to sublimate ice or release bound water,” writes Honeybee’s Jared Atkins et al. “The water vapor then flows passively into a condenser, depositing as ice to maintain a pressure gradient through the system.”
A more passive method, developed by Dr. Dreyer and his colleague Dr. Angel Abbud-Madrid at Colorado School of Mines, is called thermal mining. In this case, “heat is applied either directly on the surface via concentrated sunlight or heating elements, subsurface via conducting rods or heaters placed in boreholes, or both.” The heat turns the ice into vapor, which is then captured and refrozen.
While there’s still plenty of debate about how lunar mining operations will play out, it’s interesting to see how companies and academics are beginning to conceptualize the process.
Step 4: Processing Rocket Fuel for In-Situ Utilization
Regardless of how it is harvested, the extracted water is now ready for processing. Broadly speaking, this process breaks down into purification, electrolysis, and compression.
Purification ensures that contaminants, such ammonia and carbon dioxide, are removed from the water. One method being developed by Paragon Space Development Corporation (headquartered in Tucson, Arizona, with offices in Lakewood, Colorado) involves using a custom membrane distillation method that removes acid and water-soluble contaminants—essentially serving as a filter.
From there, purified water goes through electrolysis, which uses electricity to break water down into hydrogen and oxygen. An electrolyzer being developed by Giner Labs is integrated into Paragon’s production assembly because it’s purpose-built for aerospace applications, with high scalability and durability in mind.
The final step in processing is compressing both the hydrogen and oxygen into their liquid forms. This is the rocket fuel, ready for use.
Step 5: Refueling Assets in Orbit
The final step in the process is delivering fuel to the customer. While we can envision a future where lunar colonies are complete with their own gas stations, it’s likely that near-term refueling missions will more closely resemble ones that are already taking place.
One leader in this field is Astroscale, a Japanese company whose US presence is based in Broomfield, Colorado. Astroscale US is developing the refueling asset for the US Space Force mentioned at the beginning of this article. Designed to be refilled, satellites like this will deliver lunar-derived rocket fuel in order to extend the lifespan of other assets in orbit.
Lafayette-based Orbit Fab is providing an end-to-end refueling architecture that includes integratable docking hardware, refueling logistics software, and fuel shuttles. They plan to set up fuel depots both in Earth’s orbit and in cislunar orbit.
These companies are also working together. Under the terms of a 2022 agreement, Orbit Fab’s GEO fuel shuttle will resupply Astroscale’s fleet of LEXI Servicers with up to 1,000 kg of propellant.This pioneering move is a small taste of the emerging in-space fuel market to come.
Rocket Fuel Sales Will Drive Tomorrow’s Space Economy
Despite the difficult road ahead, we see a not-so-distant future in which people maintain a sustained presence on the Moon.
There are many motivations for creating a lunar economy, ranging from an innate desire to reach for the stars to the potential to mine for rare earth metals or helium-3 isotopes that have valuable applications here on Earth.
But the main driver is more near-term economics.
There’s money to be made creating rocket fuel to meet the growing demand from the current space economy.
Right now, a cross-section of government agencies and private companies are laying the foundation for bootstrapping this economy. Once the fuel—and the cash—starts flowing, it would not be surprising to see a significant build-out of space resources enterprises that will lead to the emergence of new commercial and scientific activities.
As always, Dynamic Tech Media will be watching closely as this story unfolds. Whether it’s quantum, space tech, or anything else that sounds like sci-fi but is actually being built right now, we’re the go-to marketing agency for future-defining innovators.
If that sounds like you, and you need help telling your story—on your website, on social media, or at conferences like Space Symposium—get in touch with us today.
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