SpaceX investors have a new, unexpected liability to worry about | Louis Velazquez - Official Website, Entrepreneur, Finance, Technology

As is the case with some of Elon Musk‘s other companies, SpaceX investors are looking towards the future. But that future comes with some added liabilities as the company’s rockets get bigger and the traffic up there gets more congested.

Low Earth orbit satellites travel at astronomical speeds up to 1,200 miles (or less) above sea level. In order to maintain that altitude, a satellite has to travel at around 17,500 miles per hour. Meaning it takes the object only about 90 minutes to complete an orbit around the planet.

SpaceX operates the largest fleet of LEO satellites in the world, by far. But those satellites aren’t designed to last very long. In fact, while SpaceX has nearly 11,000 active Starlink satellites floating in the area just before you get to outer space, according to Orbital Radar, it has launched more than 12,600 of them.

So what happened to the other 1,740?

Most of them have fallen back to Earth. And that’s by design.

But with a shelf life of only five years and SpaceX alone launching 3,000 of them per year, falling space debris will inevitably become more frequent, and the results could be devastating for people on the ground.

SpaceX is scheduled to release its first earnings report as a publicly traded company after the closing bell on Tuesday, Aug. 4.

LEO satellite debris crash back down to Earth with increasing frequency

A recent New York Times article documents how discarded hardware from the International Space Station crashed into a home in Florida in 2024.

In February 2025, a SpaceX rocket landed near a shopping mall and an airport in Poland. And months later, a defunct, three-metric-ton Chinese satellite descended over one of the Canary Islands, sending shockwaves across the region before it fragmented and burned up in the atmosphere.

While SpaceX carefully calculates when and how the satellites it puts up come back down to Earth, astronomers expect the frequency of such potentially catastrophic events to increase.

More SpaceX:

Some spaceflight safety experts see Starlink as “the number one source of collision hazard in Earth’s orbit,” according to Space.com, and some scientists worry that the amount of metal that will be burning up in the Earth’s atmosphere as older satellites are deorbited could trigger “unpredictable changes to the planet’s climate.”

Most Starlink satellites are in the lower range of Low Earth orbit. While the limit for this region is about 1,200 miles above the Earth, most Starlink satellites operate at about 342 miles above Earth.

Since the satellites are orbiting that low, atmospheric drag does a lot of damage and “inevitably reduces the orbital energy, leading to the decay of the orbit and eventual reentry of the satellite,” according to a 2023 study on the subject.

Last month, the Australian Space Agency identified six metal spheres found on a beach in Queensland as “pressure vessels from a space launch vehicle. The objects’ location and characteristics are consistent with debris from a foreign rocket body that recently re-entered the atmosphere from orbit.”

What government protections do earthlings have?

According to the New York Times, the Federal Aviation Administration (which oversees space launches) proposed a rule that would regulate the disposal of orbital debris in January, only to withdraw the idea after receiving pushback from the space industry.

With a lobby that powerful, it probably isn’t much of a surprise that there are few protections for the vulnerable people on the ground.

The Times article points out that after a hunk of space debris from a French rocket crashed into a patch of farmland in rural Kenya, the Kenya Space Agency called the crash landing “an isolated incident.”

Back in the U.S., the Federal Communications Commission requires companies to report on the risk of casualties from falling satellites.

In 2022, the FCC changed its mandate, requiring LEO satellites to deorbit within 5 years of mission completion (used to be 25 years), while also admitting that “it is widely recognized that the growing challenge of orbital debris poses a risk to the nation’s space ambitions. Defunct satellites, discarded rocket cores, and other debris now fill the environment, creating challenges for future missions.”

Meanwhile, the United Nations liability convention allows countries to seek compensation in another state’s space object hurts people or damages property and another treaty called the Rescue and Return Agreement allows governments to be paid for the cost of returning space objects.