PowerGen is also rumoured to be talking with Houston Industries, an American utility, about a merger.

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Money manager Adam Newar with Eden Capital Management in Houston likes Nabors Industries and Patterson Energy, which focus on drilling low-risk gas wells on land.

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Houston-based Powell Industries (nasdaq: POWL - news - people ) makes switchboards and other kinds of electric-power distribution equipment for businesses including commuter rail systems, utilities, and oil and gas producers.

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But many of them do choose to locate in the expensive city and pay the high wage, and as I point out in my book, expensive places like Silicon Valley employ a larger share of American workers in high value, export industries than do cheap places like Houston.

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Houston, Fort Worth, Dallas and San Antonio are all up-and-coming hubs for niche industries like telecom and bioscience.

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