US says most BP spill oil is gone or degrading

* 50 percent of BP oil "completely gone from the system"

* Most of the rest rapidly degrading, NOAA chief says

* Microscopic droplets still toxic to marine wildlife

(Updates with NOAA's Lubchenco, environmental comment)

By Deborah Zabarenko, Environment Correspondent

WASHINGTON (Reuters) - Most oil from the BP spill is gone from the Gulf of Mexico or has degraded into tiny particles, with 26 percent remaining as a sheen or tarballs, buried in sediment or washed ashore, U.S. scientists said Wednesday.

"At least 50 percent of the oil that was released is now completely gone from the system, and most of the remainder is degrading rapidly or is being removed from the beaches," Jane Lubchenco, administrator of the National Oceanic and Atmospheric Administration, told a White House briefing.

A U.S. report released earlier in the day said 74 percent of about 4.9 million barrels released since the April 20 blowout at BP's Deepwater Horizon rig can be accounted for: 25 percent was burned, skimmed or directly recovered from the wellhead, 25 percent naturally evaporated or dissolved and 24 percent was dispersed, either naturally or with chemicals.

Even that dispersed oil can leave tiny particles in the water column between the sea floor and the surface, which pose a potential hazard to wildlife, Lubchenco said.

A final 26 percent of oil is considered "residual" and is less easily categorized. Some is present as a light sheen on the ocean or as tarballs, some may have already washed ashore or been collected, some is buried in sand and sediment.

Both the dispersed and residual oil, accounting for nearly half the total, include oil that is in the process of biodegrading. Until it has been totally broken down by natural forces and bacteria into water and carbon dioxide, it still can be dangerous, Lubchenco said.

"Oil that is in microscopic droplets that is still there may be toxic to any of the small creatures under the water that are encountered," she said. "And even in very small droplets, it ... can be toxic."

"WHAT HAPPENED TO THE OIL?"

The U.S. report, titled "BP Deepwater Horizon Oil Budget: What Happened to the Oil?" found 33 percent of the oil was dealt with by government and private cleanup efforts.

This 33 percent consisted of 17 percent captured straight from the wellhead, 5 percent by burning, 3 percent by skimming and 8 percent by chemical dispersion.

Some environmental experts were skeptical of the government's presentation.

"It's troubling that reports are lumping dispersed oil still lurking under the water's surface with oil that's been captured, contributing to the sense that the oil that's been swept under the rug is no longer a problem," Dr. Bruce Stein of the National Wildlife Federation said in a statement.

"But scientific evidence shows this oil is far from gone," he said, citing signs of oil-and-dispersant mix under shells of blue crab larvae, at the base of the Gulf food chain.

The U.S. report was released just before officials from NOAA and the Environmental Protection Agency testified at a U.S. Senate hearing about the use of dispersant chemicals to combat the BP spill.

Paul Anastas, of EPA's office of research and development, acknowledged there were "environmental tradeoffs" to consider when using dispersants.

Anastas told the Senate Environment and Public Works Committee that dispersants were generally less toxic than oil, cut the risk to shorelines and degraded quickly, in days or weeks.

Much is unknown about the impact of oil and dispersants on the Gulf surface and deep down and study is needed now, Edward Overton of Louisiana State University told the committee.

"We certainly need to monitor for the long-term damage, how long will it take species to come back," Overton said.

Jackie Savitz, a scientist at the marine conservation organization Oceana, discounted short-term EPA studies showing that most dispersant chemicals are less toxic than the oil.

"It's a 48- or 96-hour study," Savitz told the panel. "Even if all the dispersant goes away in that period of time and the animal doesn't die, that doesn't mean that it's going to survive and grow and flourish and be able to escape predators." (Additional reporting by Tabassum Zakaria and Rick Cowan, graphic by Jasmin Melvin; Editing by Doina Chiacu)