Where did the oil go?

That's the question being asked in the Gulf of Mexico these days. It appears the oil has dissipated much faster than expected.

As The New York Times says today, reporters flying over the Gulf are spotting "only a few patches of sheen and an occasional streak of thicker oil" while others are seeing only a few tar balls and emulsified oil "here and there."

Is the oil hiding? Or as Peter at OPNTALK facetiously asks, has it been stolen, or is it simply "lounging" below the surface? No.

It's likely that much of the Macondo's sweet crude evaporated on the water's surface, was weathered and broken down by Gulf storms, or was consumed by the oil-eating bacteria that have been living on oil from naturally-occurring seeps since the beginning of time.

The successful deployment of a tightly-fitting cap stopped the oil from flowing about two weeks ago. And soon drilling engineers will intercept Macondo with a relief well and begin to pump heavy drilling fluids and cement into the well to kill it permanently.

Today BP reported that the crew onboard the Deepwater Driller III has removed the storm packer--the device used to safely stop operations when Tropical Storm Bonnie buffeted the Gulf--and was preparing to commence drilling again. The relief well is said to be ahead of schedule and could kill the Macondo well during the first week of August.

Despite the apparent good news from the Gulf, the administration's deepwater drilling moratorium and new requirements are continuing to slow energy development. According to government data, only two new offshore wells have been approved since the Deepwater Horizon accident in April.