Sandia National Laboratories - Economics At Work

Business Economics, July, 2003 by Arnold B. Baker

Sandia National Laboratories is a U.S. Department of Energy multi-program laboratory managed by Lockheed Martin Corporation. Our vision is "Helping our nation secure a peaceful and free world through technology."

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We were established during the Manhattan project, which produced the first nuclear weapons, and began operating as an independent laboratory in 1949. While our core mission/business is maintaining the U.S. nuclear weapons stockpile, we also have other national security related mission/business areas. These include preventing the spread of nuclear, chemical and biological weapons, developing technologies and strategies to counter threats such as terrorism, and preventing disruption to energy and other critical infrastructures.

The span of Sandia research is about as broad as you can get. It includes nanotechnologies and micromachines, as well as nuclear waste systems (e.g., Waste Isolation Pilot Plant, potential Yucca Mountain nuclear waste repository) and maintenance of the nuclear weapons stockpile. It also includes renewable (solar, wind, geothermal, biomass), fossil and nuclear energy production technologies; solid state lighting; combustion research; hydrogen; and carbon sequestration technologies--as well as technologies for water and for protecting the nation's critical infrastructures (both physical and cyber). Our government customers include the Departments of Energy, Defense, Homeland Security, Interior, State, and Transportation, as well as the Environmental Protection Administration (EPA), the Federal Aviation Administration (FAA), the General Services Administration (GSA), and the Nuclear Regulatory Commission. A lot of our technology is also developed with and used by private industry, from helping Goodyear make a better tire and Intel make better computer chips, to helping a local New Mexico baker make better cookies.

Sandia is headquartered in Albuquerque, NM, and also has a laboratory site in Livermore, CA. It generates annual revenues of about $2 billion and has a workforce of some 7,700 permanent employees. Roughly 1,400 of Sandia employees have Ph.D. Degrees and more than 2,100 hold Masters Degrees.

What Economists Do at Sandia

My group and I reside in the Energy & Critical Infrastructure business unit of the lab and report to the business unit head and corporate vice president, Bob Eagan, though we support corporate executive management and other areas of the lab as needed. As the business unit title suggests, our "business" includes energy security, global climate change, global nuclear futures, water, and critical infrastructure security, as well as the energy production and efficiency technologies noted above. We are the only national laboratory that is involved in such a broad range of energy production and consumption technologies. My group is small--five economists, including me. Four of us have Ph.D.s in economics, and our fifth has completed all the coursework for one.

What do economists do in this wide world of science and technology? Several things. We support strategic planning by our senior management, who need to understand where the world is heading in order to have technologies on hand to deal with national and global problems before they emerge. We scan publications and on-line information sources and distribute key insights to those who need to know them. We help frame major public policy issues in Sandia's purview--both to help Sandia be responsive and to help public policy makers have an improved, scientifically neutral view of issues and potential solution options. We help Sandia understand some of the implications of the macro economy and the Federal budget process on research and development funding. We help to identify potential new customers and partnerships for Sandia technologies, as well as to strategically develop and manage a portion of the Sandia intellectual property portfolio. And we provide economic and public policy input into studies, systems, and technology development projects for external customers or other parts of Sandia.

We also develop economics-based, dynamic simulation models to help support high-level public policy decisions and Sandia programs. For example, the U.S. Energy and Greenhouse Gas Model allows the user to examine energy trade-offs by sector, fuel, price, and economic growth, and to understand the implications for U.S. carbon emissions through 2025. This model has been used in college classes to educate students about energy, environmental, and economic trade-offs; and it has been used by policy-makers and their staffs in the Administration and Congress to help make better-informed energy and environmental policy decisions. Our Global Energy Futures model runs out to 2050. It lets the user examine energy, GDP, carbon emissions, and a number of other environmental effluents (including nuclear waste) for each of five world regions. It has been briefed to high-level policy makers and their staffs and used in a Washington, DC policy workshop on energy, environmental, and national security futures.