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ModSpace and Marcellus jobs

By , - Last modified: November 27, 2012 at 9:33 AM
Tim Stuhldreher
Tim Stuhldreher

In this week's upcoming Central Penn Business Journal, I write about a Berwyn-based company called ModSpace, which is starting operations at the Conewago Industrial Park in West Donegal Township near Elizabethtown.

There, ModSpace plans to refurbish the office trailers and modular buildings that it leases to clients. The company has a fleet of such buildings that it rotates from client to client, updating and modifying the units as needed.

ModSpace does brisk business with companies in the Marcellus Shale natural-gas industry, according to CEO Charles Paquin. When I asked him if that was a factor in picking the Conewago park, he replied: "Absolutely."

ModSpace expects a surge in demand from the industry, and the Conewago site will be well positioned to serve it, he said.

The company plans to employ 70 to 80 people there when fully up and running, maybe more, Paquin said.

So here's a question: To what extent should those jobs count as "Marcellus jobs?"

Jobs, after all, have been a big selling point for the natural-gas industry, and a source of controversy. Proponents argue the industry supports several hundred thousand jobs in Pennsylvania; others insist the number is far fewer.

Arguably, if ModSpace employs 75 people in West Donegal Township, and one-third of its retooled trailers go to the Marcellus industry (I have no idea what the actual figure will be), you could attribute 25 of ModSpace's jobs to the Marcellus total.

On the other hand, you couldn't point to 25 individual employees and say, "Those are the guys doing the Marcellus work." Sometimes everyone might be working to fill a Marcellus contract; at other times, nobody.

So it's easy to see that, outside the companies directly involved, the concept of a "Marcellus job" is actually rather abstract.

Now consider ModSpace's suppliers, and the effect of ModSpace's demand on their businesses. How many "Marcellus jobs" is ModSpace itself inducing?

These are the issues economic modelers try to quantify using computerized models known as input-output models.

As I've written in the past, what you get out of such models depends on the assumptions going into them. When your assumptions are rosy, you tend to get rosy results.

The Marcellus Shale industry has consistently touted jobs numbers in the hundreds of thousands. The real number is probably more in the neighborhood of 35,000, Penn State professor David Passmore told me. Pennsylvania statewide has about 6 million jobs, he noted.

As a journalist, I try to be skeptical about all numbers, and I don't intend to stop. And the flaws in the more optimistic Marcellus jobs projections seem quite clear. My private hunch about the "real" number of Marcellus jobs is a lot closer to 35,000 than 200,000.

On the other hand, a story like ModSpace's reminds you of just how far-reaching the Marcellus is. It makes me think I'll bump that internal hunch upward just a bit.

Tim Stuhldreher covers banking, finance, energy and environment. Have a tip or question for him? Email him at tims@centralpennbusiness.com. You can also follow him on Twitter, @timstuhldreher.

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