UPDATE 1-Pipeline reopens, evacuation order lifted as Texas recovers from Harvey

Harvey@ (Adds lifting of evacuation around chemical plant)

HOUSTON, Sept 4 (Reuters) - Authorities lifted an evacuation order for the area surrounding a once-burning chemical plant and a major fuel pipeline reopened on Monday in signs that Texas was edging toward recovery from the devastation left by Hurricane Harvey.

The storm dumped some 50 inches (125 cm) of rain on the low-lying Gulf coastal region after coming ashore on Aug. 25, killing about 50 people and causing what the Texas governor said could be up to $180 billon in damage.

Flooding led to a series of fires at the Arkema SA chemical plant in Crosby, about 25 miles (40 km) northeast of Houston. Containers of the chemicals, which are unstable if not kept refrigerated, started igniting on Thursday after power outages cut off cooling systems.

The U.S. Environmental Protection Agency and the Texas Commission on Environmental Quality performed a controlled burn of the organic peroxides on Sunday in order to eliminate any vestiges and reduce the danger.

On Monday, the company said the Crosby Fire Department had lifted a 1.5-mile (2.4-km) evacuation zone around the plant, allowing neighbors to return to their homes, and that the company had opened an assistance center to help those affected find temporary housing.

The lifting of the order may help the town of 2,300 people return to normal.

"Some of the people within the evacuation zone had water in their homes and really wanted to get in there, but police wouldn't let them," said Daniel Jones, 67, who owns an antique mall in town. "People were worried about what's in the air but the EPA has been on top of it."

Organic peroxides made at the plant are used in the production of plastic resins, polystyrene, paints and other products.

The EPA has said its testing methods have not found toxic concentration levels in smoke from the plant, although 15 Harris County Sheriff's deputies were briefly taken to a hospital last week after inhaling smoke from the fires.

Harvey also walloped the most important energy hub in the United States, taking up to one-fourth of the country's oil refining capacity offline and driving up fuel prices.

But Colonial Pipeline, the largest American fuel system, said on Monday it would restart a segment of its pipeline in Texas that had been cut off, enabling it to restore the flow distillates such as diesel fuel from Texas to New Jersey.

The gasoline pipeline was due to resume operations on Tuesday, the company said.

Another fuel system, Explorer Pipeline, said a link running from Texas to Oklahoma restarted on Sunday, with a second pipeline from Oklahoma into the Midwest expected to resume on Monday.

Meanwhile, port operations across the U.S. Gulf Coast's oil and gas industry were slowly coming back, according to the U.S. Coast Guard.

Vessels with up to 40-foot drafts were allowed to exit and enter the Houston Ship Channel on Monday, which is home to major oil refineries and petrochemical plants. Larger ships and an upper portion of the channel were still restricted, said Alberto Hernandez, a watch supervisor at the U.S. Coast Guard's Vessel Traffic Service in Houston.

Salvage efforts continued on Monday to remove a sunken drydock in an industrial portion of the channel, Hernandez said.

(Additional reporting by Gary McWilliams in Houston and David Shepardson in Washington; Editing by Paul Simao)