UPDATE 1-U.S. to probe Texas air regulator's rulings for racial bias

(Adds state response, timetable for review)

Oct 15 (Reuters) - The U.S. Environmental Protection Agency on Friday said it would investigate the Texas air regulator over allegations of racial bias in rulings involving pollution in Black neighborhoods by a refinery waste recycler.

The agency accepted a complaint against the state over its oversight of Port Arthur, Texas-based Oxbow Calcining, which produces petroleum coke from oil refinery byproducts.

An environmental advocacy group has alleged the state's air quality regulator violated residents' civil rights by allowing the plant to operate without a scrubber to capture sulfur dioxide. Between 2016 and 2019, the plant released about 22 million pounds per year of sulfur dioxide, an eye and lung irritant, over predominantly low-income and Black areas.

A spokesperson for regulator Texas Commission on Environmental Quality said it was reviewing the complaint.

“I am encouraged by the response of the EPA to investigate our concerns," said John Beard, a former Port Arthur city councilor and founder of advocacy group Port Arthur Community Action Network.

The plant is part of William Koch's Oxbow Corp, one of the largest recyclers of oil refinery and natural gas byproducts. The company was not immediately available for comment.

Within a three mile radius of the Port Arthur plant, the population is 98% people of color and 62% lower income, the group said.

EPA said it would pursue alternative dispute and informal resolution processes to settle the complaint and, if unable to reach an agreement, would look to deliver preliminary findings within 180 days of launching the investigation. (Reporting by Gary McWilliams; Editing by David Gregorio and Chris Reese)