By Roberta Rampton
WASHINGTON (Reuters) - The Energy Department wants to sell $500 million worth of oil from strategic reserves to help generate revenue, a little-noticed provision in a spending bill highlighted by two senators on Wednesday.
Jeff Bingaman, the Democratic chairman of the Senate Energy Committee, and Lisa Murkowski, the ranking Republican, said using emergency reserves to help pay for government operations set a dangerous precedent, and they urged their colleagues to reject it.
"I believe this is a bad precedent. I believe we should reject this part of the legislation," Bingaman said
The measure is part of an appropriations bill for the Energy Department, and the senators' amendment to get rid of the provision is one of hundreds facing the Senate.
It is not clear when amendments will be voted on, and whether the funding bill will be able to advance in Congress, which is struggling to agree on how to fund government operations.
Bingaman said the $500 million draw-down was first proposed when the strategic petroleum reserve was filled to capacity with about 727 million barrels of oil.
The Obama administration wanted to sell some oil to make repairs to the underground salt caverns where the oil is stored, he said.
The House of Representatives agreed to that request in June, when it passed its version of the spending bill.
But later that month, the administration announced it would sell 30.64 million barrels of oil from reserves as part of an international response to turmoil in Libya which affected its crude exports.
That sale generated $3 billion, Bingaman said.
"Clearly, the president's proposal from February to create a little free space in the SPR is no longer necessary," he said.
The SPR should be saved for true supply disruptions to protect U.S. energy security, Bingaman and Murkowski said.
"We cannot treat it like a national ATM that can be tapped when the money is tight here," Murkowski said, referring to automatic teller machines.
Dianne Feinstein, top Democratic appropriator for energy in the Senate, said the Energy Department has told her aides that "the budget request is valid due to the department's need for operational flexibility."
Murkowski said the government should speed up approvals for more drilling to get more revenue rather than take oil from emergency stockpiles.
(Editing by Bob Burgdorfer)