UPDATE 3-Harvey drenches Louisiana, sparks blast at Texas chemical plant

(Adds details on chemical plant blast)

LAKE CHARLES, La./HOUSTON, Aug 31 (Reuters) - The remnants of Tropical Storm Harvey drenched northern Louisiana on Thursday as it moved inland, leaving behind record flooding that paralyzed the U.S. energy hub of Houston, killed at least 35 people and drove tens of thousands from their homes.

Two explosions were reported at a flood-hit chemical plant in Crosby, Texas, 30 miles (48 km) northeast of Houston, with one sheriff's deputy sent to the hospital after inhaling toxic chemicals.

The Arkema SA plant had lost power as a result of the storm, causing the organic peroxides stored onsite to warm to combustible levels. The company urged people to stay away from the area, warning that further blasts were likely.

The death toll was rising as bodies were found in receding waters. Some 32,000 people were forced into shelters around the region since the storm came ashore on Friday near Rockport, Texas, as the most powerful hurricane to hit the state in a half-century.

By Thursday, the storm was downgraded to a tropical depression. Maximum sustained winds were 30 miles (48 km) per hour at 4 a.m. CDT (0900 GMT), when Harvey was located about 15 miles (24 km) south of Monroe, Louisiana.

The storm's rains wrought the most damage along the Gulf Coast, and the National Weather Service warned that as much as 10 inches (25.4 cm) could fall in parts of Mississippi, Tennessee and Kentucky.

The Houston Fire Department will begin a block-by-block effort on Thursday to rescue stranded survivors and recover bodies, Assistant Fire Chief Richard Mann told reporters.

Nearly 30 inches (76.2 cm) of rain hit the Port Arthur, Texas, area, the National Weather Service said.

"Our whole city is underwater," said Port Arthur Mayor Derrick Foreman in a social media post where he also broadcast live video of floodwaters filling his home in the city of 55,000 people, about 100 miles (160 km) east of Houston.

Beaumont, near Port Arthur, said it had lost its water supply due to flood damage to its main pumping station. Residents in the city of about 120,000 people would lose water pressure from Thursday morning.

Fort Bend County ordered a mandatory evacuation on Thursday for areas near the Barker Reservoir, which was threatening to flood. The reservoir is about 20 miles (32 km) west of Houston.

The county did not say how many people the evacuation order would affect.

Clear skies in Houston on Wednesday brought relief to the energy hub and fourth-largest U.S. city after five days of catastrophic downpours. The first flight out of Houston since the storm hit boarded on Wednesday evening.

Mayor Sylvester Turner said he hoped the port of Houston, one of the nation's busiest, would reopen soon.

Police in Houston's Harris County said 17 people remained missing.

Nearly 200,000 homes and businesses in Louisiana and Texas were without power on Thursday, utilities reported.


Flooding shut the nation's largest oil refinery in Port Arthur in the latest hit to U.S. energy infrastructure that has sent gasoline prices climbing and disrupted global fuel supplies.

Average U.S. retail gasoline prices have surged to $2.449 per gallon nationwide in the storm's wake, up 10.1 cents from a week ago, the AAA said on Thursday.

Moody's Analytics is estimating the economic cost from Harvey for southeast Texas at $51 billion to $75 billion, ranking it among the costliest storms in U.S. history.

At least $23 billion worth of property has been affected by flooding from Harvey just in parts of Texas' Harris and Galveston counties, a Reuters analysis of satellite imagery and property data showed.

Governor Greg Abbott warned that floodwaters would linger for up to a week. The area affected is larger than that hit by 2005's Hurricane Katrina, which killed more than 1,800 people in New Orleans, and 2012's Superstorm Sandy, which killed 132 around New York and New Jersey, he said.

Houston's metropolitan area, whose economy is about as large as Argentina's, has a population of about 6.5 million, far greater than New Orleans' at the time of Katrina.

A day after visiting Texas to survey the damage, U.S. President Donald Trump pledged on Wednesday to stand by the people of Texas and Louisiana.

Vice President Mike Pence and several Cabinet secretaries will travel to Texas on Thursday to meet residents affected by the storm as well as local and state officials, his press secretary said.

An army of volunteers has turned out to help the thousands of police, National Guard personnel, Coast Guard flood teams and emergency crews to ferry thousands of people stranded in floodwaters to safety.

(Additional reporting by Richard Valdmanis, Mica Rosenberg, Marianna Parraga, Gary McWilliams, Ernest Scheyder, Erwin Seba, Ruthy Munoz, Peter Henderson and Andy Sullivan in Houston, David Gaffen and Christine Prentice in New York, Jon Herskovitz in Austin, Texas, and Brendan O'Brien in Milwaukee; Writing by Scott Malone and Jon Herskovitz; Editing by Jeremy Gaunt and Lisa Von Ahn)