Energy lab in Oak Ridge powers Tennessee economy

Department of Energy complex generates $5.6 billion economic impact

Thomas Zacharia, Oak Ridge National Laboratory director, speaks to entrepreneurs and others Wednesday, Aug. 23, 2017, during Zacharia's visit to the Innovation District at the Edney Building in Chattanooga, Tenn. Zacharia became the Oak Ridge Lab director July 1.

The U.S. Department of Energy is helping to power the economy of Tennessee, especially in East Tennessee, with more than 34,000 jobs supported by DOE's Oak Ridge Reservation, a new study shows.

The once-secret city of Oak Ridge that helped make the world's first atomic bomb during World War II has grown over the past 75 years to become America's biggest non-defense research laboratory, one of the world's biggest producers and recyclers of nuclear weapons and a major environmental cleanup site. Last year, DOE allocated $3.4 billion to its Oak Ridge facilities, employing 12,618 workers at the site through DOE and its contractors.

A new economic analysis of fiscal 2017 spending by the consulting firm of Booz Allen Hamilton estimates the spinoff and support jobs related to the Oak Ridge complex generated another 21,878 jobs in Tennessee. For every one job created by DOE and its contractors, an additional 1.7 jobs were created across the state.

The study estimates DOE's economic impact on the state of Tennessee from its Oak Ridge complex equals $5.6 billion.

Oak Ridge by the numbers

› $3.4 billion: DOE spending in fiscal 2017 in Oak Ridge› $5.6 billion: Total economic impact when spinoff and› 12,618: Employees of DOE and its contractors at Oak Ridge› 21,878: Jobs created by the multiplier effects of DOE investment› 2,300: Number of patents and licenses obtained by Oak Ridge research, including 127 in 2017.› $32 million: State and local taxes were generated by DOE-related spending.Source: Booz, Allen and Hamilton study for the East Tennessee Economic Council (ETEC)

photo Jim Campbell

"Once home to the Manhattan Project's uranium-enrichment operations that altered the course of World War II and the Cold War, today its reach is even broader," said Jim Campbell, president of the East Tennessee Economic Council that commissioned the economic study.

Campbell said the Oak Ridge National Laboratory, the Y-12 weapons plant and DOE's ongoing environmental cleanup work have brought billions of dollars of investment to the region. The DOE facilities have helped position Tennessee for the future.

"Having this kind of asset and investment in East Tennessee really does bring the best and the brightest of the world here to work on the next-generation technologies and challenges," Campbell said.

Oak Ridge generated 127 licenses for new products in fiscal 2017.

"We're working hard to get as much of that commercially viable technology as we can out to companies," he said.

U.S. Rep. Chuck Fleischmann, R-Tenn., a member of the House Appropriations Committee who regularly advocates for funding for Oak Ridge projects, said the new economic study "confirms what I have always believed: Oak Ridge National Lab, Y-12, and the other DOE missions hosted by the Oak Ridge community are great for Tennessee."

Fleischmann said DOE's Oak Ridge complex "helps drive an ecosystem of innovation alongside Tennessee businesses."

Benefits beyond Oak Ridge

"The impact of DOE in the state extends well beyond Oak Ridge," Fleischmann said. "The opening of an ORNL office in Chattanooga is a great example of this, as is the procurement effort to support the construction of the Uranium Processing Facility at Y-12."

ORNL is working with EPB in Chattanooga on studying the utility's smart grid and how it can be used to create more efficiency and better reliability of power service. Branch Technology in Chattanooga also is working with researchers at ORNL on new materials and design technologies to better design buildings for the future.

Because of the technical nature of most of the work done in Oak Ridge, the average annual salary for a DOE-related employee in fiscal 2017 was $81,000, nearly double the median pay for all workers in Tennessee.

Despite nuclear disarmament agreements designed to limit the number of nuclear warheads made at Y-12, spending at Oak Ridge is expected to increase in coming years as DOE ramps up construction of the Uranium Reprocessing Facility (UPF) to replace much of the aging Y-12 complex built during World War II. Fleischmann said he is eager to see Tennessee contractors secure much of the construction work on the $6.5 billion facility.

photo This May 1, 2013, staff file photo shows Oak Ridge National Laboratory's main campus.

Tennessee businesses already benefit the most from the Oak Ridge complex. Of the approximately $1.1 billion in non-payroll spending from DOE and its contractors in fiscal 2017, more than $943 million went to Tennessee businesses for the procurement of raw materials, services, and supplies, the Booz, Allen and Hamilton study found.

Anti-nuclear groups object to the cost and purpose of the Uranium Processing Faciity, which critics claim undermine global efforts toward nuclear non-proliferation by esablishing more nuclear weapons production capability.

"This project is already a classic boondoggle, and they are just getting started," said Ralph Hutchison, coordinator of the Oak Ridge Environmental Peace Alliance (OREPA) in Knoxville. "Worse, it undermines U.S. efforts to discourage nuclear proliferation around the world. How can we oppose the nuclear ambitions of other countries when we are building a bomb plant here to manufacture 80 thermonuclear cores for warheads every year?"

But proponents of UPF insist it is needed to update weapons production capability for the U.S. to remain a dominant superpower in the world. The project has been revamped to bring its costs under control, and its completion should be a boon to many businesses in the Volunteer State.

The Uranium Processing Facility project, which is still at least a couple of years away from maximum funding, will be the largest construction project in Tennessee since the Manhattan project put Oak Ridge on the map during World War II.

The secret city created in World War II

Oak Ridge was not actually even technically on any maps until 1949, even though it employed nearly 100,000 scientists, engineers, machinists, operators and construction workers during World War II to help make the first atomic bomb.

The rural East Tennessee area of Oak Ridge was picked for the Manhattan project largely for political reasons, according to historians.

President Franklin Roosevelt needed to convince Congress to spend a large amount of money without knowing what it was going to be used for. Roosevelt reportedly asked Senate Budget Committee Chairman Kenneth Douglas McKellar, a Democrat from Tennessee, if this could be done. To which McKellar is said to have replied, "Yes, Mr. President, I can do that for you now just where in Tennessee are you going to put that thang?"

Few of the scientists who came to Tennessee to work on the Manhattan project knew what they were working on, and even fewer knew anything about uranium. Bill Wilcox, a young chemist who worked for Eastman Kodak at the time, said he only knew he was doing "war work," and was never allowed to call uranium by its actual name.

Today, the walls of the once-secret city are more open, although security still remains tight around the Y-12 weapons plant. But the Oak Ridge National Laboratory and its Spallation Neutron Source Materials facility work with hundreds of companies and researchers on a variety of high-tech projects.

photo U.S. Rep. Chuck Fleischmann

The Department of Energy's Advanced Manufacturing Office also gives industry access to ORNL's capabilities for early stage research in additive manufacturing. By working with the office, companies reduce technical risk and build business cases for private investment in new production technologies that use less energy, reduce production costs, and create new products.

Another off-site facility is the Carbon Fiber Technology Facility located in the Horizon Center Industrial Park in Oak Ridge, which offers a highly flexible, highly instrumented carbon fiber line for demonstrating advanced technology scalability and producing market-development volumes of prototypical carbon fibers.

The new Booz, Allen and Hamilton study of the economic benefits of the Oak Ridge complex updates a similar study in 2013. Compared with four years ago, the newest study estimates that Oak Ridge is supporting 1,388 more jobs and nearly $700 million more in payroll than four years earlier.

The new study comes as Tennessee's top Congressional leaders prepare to gather next week in Oak Ridge for the Tennessee Valley Corridor summit, scheduled May 29-31 at the Y-12 National Security Complex.

The annual gathering of government and business leaders from across the Tennessee Valley will explore how Oak Ridge is working on clean energy, cyber and national security, advanced manufacturing and education. The summit also will celebrate the 75th anniversary of the City of Oak Ridge, the 85th anniversary of the Tennessee Valley Authority and the 50th anniversary of NASA's Apollo 8 mission.

Contact staff writer Dave Flessner at or 423-757-6340.