WASHINGTON (REUTERS) - The top US pipeline regulator on Thursday (May 5) said it proposed a nearly US$1 million (S$1.4 million) penalty for management failures at energy pipeline operator Colonial Pipeline that contributed to widespread fuel shortages along the United States East Coast in 2021.

A cyberhack shut down Colonial's 5,500 mile (8,900km) pipeline for five days last year, disrupting supplies of petrol, diesel and jet fuel to thousands of stations and airports.

Colonial had failed to plan and prepare for a manual restart and shutdown operation, which contributed to the national impacts after the cyber attack, said the regulator, the US Department of Transportation's Pipeline and Hazardous Materials Safety Administration, in a notice.

"Colonial Pipeline's ad-hoc approach towards consideration of a 'manual restart' created the potential for increased risks to the pipeline's integrity as well as additional delays in restart, exacerbating the supply issues and societal impacts," the regulator said.

It also issued an order requiring the pipeline operator to test and verify its internal communication plan for manual operation and develop a procedure to verify correct alarm set-points values amongst other tests.

Colonial said in a statement it looked forward to engaging with the regulator to resolve the matters raised, adding that the notice was the first step in a multi-step regulatory process.

"Our coordination with government stakeholders was timely, efficient and effective as evidenced by our ability to quickly restart the pipeline in a safe manner five days after we were attacked, which followed localised manual operations conducted before the official restart," a spokesman said.