The about 14,000 residents of Port Neches 95 miles (153 km) east of Houston were told to flee late on Wednesday when air monitors detected high levels of cancer causing petrochemicals butane and butadiene following an explosion last week.
Butadiene is the main product of the TPC Group's facility in the city struck by last week's blast and fire, which injured three workers and prompted an initial, two-day evacuation.
The fire was put out on Tuesday after burning for six days.
"This was a very serious explosion," Manuel Ehrlich, a board member of the U.S. Chemical Safety Board, said at a briefing on Thursday. He described the incident as "a fundamental failure in the system" at the plant.
It was the fourth major petrochemical fire in Texas this year.
A March blaze outside Houston burned for days and was followed a month later by a fire at another Houston-area chemical plant that killed one worker. An Exxon Mobil Corp chemical plant fire in Baytown, Texas, injured 37 in July.
"The reason why we're seeing so many this year is difficult to quantify," said safety board investigator Lauren Grim.
The specific event that triggered the TPC explosion and fire has not been determined, Ehrlich said. Workers at the plant had noticed a vapor cloud before the blast.
"We are not trying to assume any ideas about what the cause was," Jason Sanders, a TPC official said in response to the description of a failure in the system. "The CSB is there to thoroughly investigate what happened. We need to trust their process."
The top executive of Jefferson County, Jeff Branick, lifted the latest order less than a day after warning that elevated butadiene levels measured in some parts of Port Neches could cause dizziness, nausea, headaches, irritated eyes and throats.
"I don't want this being characterized as a regular occurrence, because it is not," Branick said at a media briefing.
But one resident, Johnny Powers, 70, a retiree from the Exxon Mobil Complex in Beaumont, Texas, said: "We're used to smells in this area" and would remain in Port Neches because his grandchildren were there.
Another resident with a family, Marissa Hearn, 26, said she had lived in the area all her life but would now consider leaving.
"If we had the money we'd get up and get out."
Fire officials said workers at TPC on Thursday stemmed butadiene leaks, reducing chemical levels over Port Neches, which is in Jefferson County, to non-irritating levels.
Schools in Port Neches and nearby Groves were closed for the rest of the week. Students had been allowed to return on Tuesday.
"There are a lot of these old plants that ought to be shut down," said Neil Carman, clean air program director for the Texas chapter of the Sierra Club, an environmental group that has sued industrial plants over toxic emissions. "TPC is 75 years old."
TPC's Sanders said it would take weeks to remove all the chemicals from the plant.The 218-acre (88-hectare) plant makes flammable chemicals used in the production of synthetic rubber and a gasoline additive.