https://commoncog.com/cash-flow-games/#3-pre-payments-in-the...
Liquidity is expensive. Selling a carrier one at a time is like a retail business where you're expected to hold onto stock. If you don't build up an inventory to sell from and just sell one unit, you have to markup the price to cover the cost of the factory when it is idle.
Now that it's gone we're ultra dependent on a by-product of methane extraction and liquification for LNG transport. But most of the helium we extract as natural gas is not separated, as it just gets piped as gas. Helium is getting very very expensive.
But amplifying the orders just makes the problem worse.
That means that eventually the factory goes idle, when all the demand is serviced by the spares.
The IRA was a law passed by Congress. It set aside funds for grid upgrades, but did give some latitude to the President to deal with crises, because it was understood that Congress couldn't move quickly enough to deal with sudden supply issues. One thing that happened was the investments into grid upgrades created a demand shock, and transformer pricing and timelines surged upwards. So at that point the President invoked the DPA and used a chunk of IRA funding to try to unsnarl the transformer pipeline so the rest of the project could proceed. Then Trump (for basically arbitrary reasons) decided to screw it up. (He's also screwed it up in ways that probably just plain violate the law, but he doesn't care about that either -- which is why "run policy purely from the Legislative branch" doesn't fix any of this.)
Given the context -- a broad law duly passed by the slower legislative branch, a crisis dealt with (according to the law) by the more nimble Executive branch -- I am struggling to make your criticism sound reasonable, even with the absolute maximal dose of charity. This is basically the kind of governance that we want a functioning Legislative and Executive branch to engage in; it was screwed up on purpose; and your proposed solution/excuse does not produce better outcomes.
It's pretty straightforward...
> but did give some latitude to the President to deal with crises
All the President needs to do is say it's not a crisis. If you want it to stick past the current administration, pass a law after the crisis.
Anything that's at the discretion of the executive is at the desretion of the executive. I'm not saying it's great or smart but there's zero reason to be surprised and I'll not be surprised when a bunch of Trump's orders get reversed too.
They have been:
https://www.energy.gov/oe/transformer-resilience-and-advance...
The problem expressed, I think, that it is not useful to scale up production quickly (or perhaps at all), because a factory catching up on all of their orders means that the factory goes idle. Idle factories can't afford to pay wages, so they lay off some or all of the workers -- and those folks go and find different jobs.
And when they leave, they take their institutional knowledge with them.
So the sustainable goal is to never be idle, and the way to accomplish this is to never catch up.
For an example of how idle factories can go sideways, look at the Polaroid film story: Polaroid closed. Everyone left. Some investors with a big dream eventually bought many of the physical assets that remained.
But owning some manufacturing equipment didn't help them much because the institutional knowledge of producing Polaroid film had already evaporated. They had to largely re-invent the process. (And they've done a great job of that, but it's still not the same film as the OG Polaroid was.)
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So anyway, suppose the government steps in and simply artificially multiplies transformer orders x2, and pays them fairly for this doubled production. Since transformers are tangible things and we can't just spin up more AWS instances to cover demand, the immediate result is that the "short" lead time on new orders has increased from 2 years, to 4.
That's not seeming to be very ideal. It seems to amplify the problem instead of resolve it.
I suppose that the government could also offer safeguards that would help protect the businesses (including suppliers for parts) once they eventually catch up on orders, and that this might motivate them to scale production sooner instead of later (or never).
Which -- you know -- that isn't unprecedented. As an example: The Lima Army Tank Plant, in Lima, Ohio, is place where I've spent a fair bit of quality time. It still exists and continuously has employees largely because the institutional knowledge of how to build tanks (and a few other war machines) is considered to be too important to lose. During lulls, it mostly just sits there on its expansive site, loafing along repairing stuff that comes in, and waiting for the day when things to turn bad enough that we need to start increasing our number of tanks again.
It needs to keep operating (at any expense), and so with the magic of the government money-printing machine: It does. But it's one of the most actively depressing industrial sites I've ever been to; like the life just gets sucked right out of you before even getting past the entrance gate.
We can certainly extend that kind of thing to transformer production. But should we?
I mean: I've got some MREs in the pantry along with some other shelf-stable food, and I've got some water stored (primarily to fill empty space in the chest freezer for various practical reasons, but it exists). I keep some basic first aid and survival stuff in the car (bandages, space blankets, stuff to catch fish with, stuff to cook with). I've got my camping gear, including a small off-grid solar power system, stored in organized totes that can be loaded up very quickly. And I try to keep a minimum of a couple hundred miles worth of fuel in the gas tank at all times.
I do these things just in case. The bulkiest items see frequent use. None of this cost me very much to buy, or to maintain. And none of these things can replace the lifestyle I've come to expect, but they might be able to buy me some time.
Can we afford to have a spare copy of the hard-to-produce parts of the electrical grid sitting in a warehouse?
Would we even want to rebuild the grid in the same shape if the shit really hit the fan and we had to start it over from scratch?
But the knowledge is already being preserved. Unlike the singular army tank plant (which smells like a combination of despair and naphthalene), there are a plurality of transformer factories in the US...and they are always operating at 100%.
As long as that continues to be the case (there's no sign that it will change), then the expertise is actively being employed, refined, remembered, and transferred.
So even if we do nothing, we're good on that front.
We just aren't keeping up with present-day demand. (Hence, the article.)
But yet: The store shelves were empty while the janitorial and institutional supply chains had a surplus. We were incompetent at moving things from Pile A and putting them into Hole B.
So, sure: In the event of an unprecedented geomagnetic event destroying big chunks of the grid, we're hosed. I agree. And people will die. It will be awful. If I'm sure of one thing, I'm sure that we'll somehow manage to completely fuck this up.
So maybe we should focus less on stockpiling a bunch of ludicrously-expensive parts that we hope to never have a use for. Instead, maybe we should focus more on making the grid less reliant on centralization, and instead comprise it of smaller parts that that can be operated more-independently.
Both things are very expensive.
One of them is a reactive solution to a problem we've never had -- and that we hope to never have. The other is a proactive solution we can start using immediately, and also into the future.
(An ounce of prevention is worth a pound of cure, as they say.)
For that kind of sameness, it seems like it'd be easier to do nothing at all.