EXHIBIT 10.9

                               SECURITY AGREEMENT
                               ------------------

     THIS  SECURITY  AGREEMENT  (the "AGREEMENT") is made and executed as of the
20th  day  of  March,  2003,  by  ONSITE  TECHNOLOGY L.L.C., an Oklahoma limited
liability  company,  ENVIRONMENTAL  SAFEGUARDS,  INC., a Nevada corporation, and
NATIONAL  FUEL  & ENERGY, INC., a Wyoming corporation, each having its principal
office  and  chief executive office at 2600 South Loop West, Suite 645, Houston,
Texas  77054  (collectively,  "DEBTORS"  and individually, a "DEBTOR") to and in
favor  of RINECO RECYCLING, LLC, an Arkansas limited liability company ("SECURED
PARTY"),  having  its  principal  place of business at 629 Vulcan Road, Haskell,
Arkansas  72015.

                              W-I-T-N-E-S-S-E-T-H:

     WHEREAS,  Debtors  have  made  application to Secured Party for a term
     loan  in  the  principal  amount  of  $1,500,000.00;  and

     WHEREAS,  Secured  Party  has agreed to extend said loan to Debtors in
     accordance  with  the  terms and provisions of that certain Commitment
     Letter (herein so called) dated March 6, 2003, executed by and between
     Debtors,  as  Borrowers,  and  Secured  Party, as Lender, the terms of
     which  Commitment  Letter  are  incorporated  herein  by  reference;

     NOW,  THEREFORE,  in  consideration  of  the  premises,  and  of the mutual
covenants  and agreements herein set forth, the parties, intending to be legally
bound,  hereby  agree  as  follows:


                             SECTION 1. DEFINITIONS.

     Except  as  otherwise  defined  herein,  or  unless  the  context  requires
otherwise,  the  terms  used  in  this  Agreement  shall  have the same meanings
assigned  to  them  in  the  Commitment  Letter.


                        SECTION 2. THE GRANTING CLAUSES.

     In  order  to  secure  the payment of the principal of and interest on that
certain  Promissory  Note  of  even  date  herewith  in  the principal amount of
$1,500,000.00 from Debtors, as Makers, payable to the order of Secured Party, as
Payee  (the  "NOTE"),  Debtors do hereby grant, bargain, sell, transfer, convey,
mortgage,  assign,  pledge,  hypothecate and give a security interest in all and
singular  the  following  described properties, rights, interests and privileges
(the  "COLLATERAL")  unto Secured Party, its successors and assigns forever, for
the  benefit,  security  and protection of all present and future holders of the
Note  from  and  after  the issuance of the Note; provided always, however, that
these presents are upon the express condition that if Debtors shall pay or cause
to  be  paid  all  the


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SECURITY AGREEMENT
Page  2
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principal  and  accrued  interest  thereon outstanding under the Note, and shall
observe,  keep  and  perform all the terms, conditions, covenants and agreements
contained  in  this  Agreement,  the  Commitment  Letter  and any other document
pertaining  to  or  securing the Note, then these presents and the estate hereby
granted  and conveyed shall cease and this Agreement shall become null and void;
otherwise,  this Agreement shall remain in force and effect. It is the intention
of  each  Debtor  to  grant  Secured  Party  all  its respective rights, powers,
privileges  and  options  under and to the Collateral effective immediately, and
continuing  from  and  after  the date of this Agreement until the Note has been
fully  paid  and  discharged;  provided,  however,  that  so long as no Event of
Default shall have occurred and be continuing hereunder or under the Note or any
other  document  pertaining to or securing the Note, Debtor shall be entitled to
use  the  Collateral  in  the  conduct of its business. Debtors hereby expressly
consent  and  agree  that  Secured  Party  shall have a security interest in the
following  described  Collateral  and  any and all accessions, appurtenances and
additions  to  and  substitutions  for  any  of the foregoing Collateral and all
products  and  proceeds  (including, without limitation, insurance proceeds) and
awards  and  rents,  issues  and profits (provided, unless and until an Event of
Default  shall  have  occurred hereunder or under the Note or under any document
pertaining  to  the  Note,  Debtor  shall be entitled to collect any such rents,
issues  and  profits)  of  any  of  the  foregoing Collateral, together with all
renewals  and  replacements thereof or therefor, whether now owned by Debtors or
existing  or  hereafter acquired, created or arising (provided, the inclusion of
proceeds  does  not  authorize  Debtors to sell, dispose of or otherwise use the
Collateral  in  any  manner not authorized by the Commitment Letter) as security
for  the  Note:

          THE  COLLATERAL  DESCRIBED  AND  DEFINED  IN  THE  COMMITMENT  LETTER,
INCLUDING,  WITHOUT  LIMITATION,  THE  FOLLOWING  THREE  (3)  INDIRECT  THERMAL
DESORPTION  UNITS:


     1.   OnSite Indirect Thermal Desorption Unit #9 (Serial # 0009) with
          condenser and attached equipment.
          Location - 629 Vulcan Road; Haskell, Arkansas 72015

     2.   OnSite Indirect Thermal Desorption Unit #10 (Serial # 0010) with
          condenser and attached equipment.
          Location - 210 Magnolia Drive; Galena Park, Texas 77547

     3.   OnSite Indirect Thermal Desorption Unit #5 (Serial # 0005) with
          condenser and attached equipment.
          Location - 210 Magnolia Drive; Galena Park, Texas 77547

          THE SECURED  PARTY'S  SECURITY INTEREST SHALL ALSO INCLUDE ANY AND ALL
DOCUMENTS  OF TITLE EVIDENCING ANY PART OF SAID COLLATERAL, AND ANY AND ALL CASH
AND  NONCASH  PROCEEDS  FROM  ANY  SALE  OR OTHER DISPOSITION OF ANY COLLATERAL;
PROVIDED,  NOTHING  CONTAINED  HEREIN  OR


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IN  ANY  FINANCING STATEMENT SHALL BE DEEMED PERMISSION OR ASSENT TO ANY SALE OR
DISPOSITION  OF  SUCH  COLLATERAL.

                   SECTION 3. REPRESENTATIONS AND WARRANTIES.

     Debtors represent and warrant to Secured Party until payment in full of the
Note  as  follows:

     3.01     REQUIREMENTS OF LAW. All of the requirements of applicable law and
              --------------------
regulations  have  been  fully  complied  with  and  all  other  acts and things
necessary to make this Agreement a valid, binding and legal instrument to secure
the  Note  have  been  done  and  performed.

     3.02     TITLE TO THE COLLATERAL. Debtor OnSite Technology L.L.C. has title
              -----------------------
to  the  Collateral  free and clear of all security interests, liens, claims and
encumbrances of any kind whatsoever other than those created in favor of Secured
Party  by this Agreement, and has the right, power and authority to grant a lien
and security interest in the Collateral to Secured Party. No financing statement
covering  the  Collateral  is on file in any public office except those given to
evidence,  secure  or  perfect  indebtedness  which  is  owed  to Secured Party.

     3.03     REPRESENTATIONS  AND WARRANTIES IN COMMITMENT LETTER.   All of the
              ----------------------------------------------------
representations and warranties of Debtors set forth in the Commitment Letter are
incorporated  herein  by  reference  and made a part of this Agreement as if set
forth in full, and made again by Debtors to Secured Party and are true, complete
and  accurate  as  of  the date of this Agreement and shall continue to be true,
complete  and  accurate  at  all  times  hereafter  under  this  Agreement.

     3.04     ORGANIZATION, AUTHORITY AND QUALIFICATIONS.  (a)  Each Debtor is a
              ------------------------------------------
business  organization  duly  organized,  validly  existing and in good standing
under  the laws of the state of its respective organization, (b) each Debtor has
the  power  and authority to execute, deliver and perform this Agreement and the
other  documents  to  which  it  is  a party, and has the power and authority to
borrow  the  funds/indebtedness evidenced by the Note, and (c) each Debtor is in
all  respects  duly  qualified  and  licensed  under  all  applicable  laws  or
regulations  to  own its properties as now owned and to carry on its business as
now  conducted.

     3.05     FINANCIAL  STATEMENTS.  Debtors  have  delivered  to Secured Party
              ---------------------
certain  financial  information  of  Debtors. Such statements fairly reflect the
financial condition and assets and liability of Debtors at such dates and fairly
reflect  the  results  of operations of each Debtor all in conformity with GAAP.
Except  as  specifically  disclosed  to  Secured  Party  with  respect to Debtor
Environmental Safeguards, Inc., there has been no material adverse change in the
condition,  financial  or  otherwise,  of any Debtor since the delivery thereof.

     3.06     DEFAULT. No Debtor is in default in any material respect under the
              -------
provisions  of  any  document  or instrument evidencing any material obligation,
indebtedness,  or  liability  of  such  Debtor


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or  of  any agreement relating thereto, or under any order, writ, injunction, or
decree  of any court, nor is any Debtor in default in any material respect under
or  in  violation  of  any  order,  regulation,  or  demand  of any governmental
authority, which default or violation would have consequences which would have a
material  adverse  effect  on  the  business  or  properties  of  such  Debtor.

     3.07     AUTHORIZATION  AND  COMPLIANCE  WITH LAWS AND MATERIAL AGREEMENTS.
              -----------------------------------------------------------------
The  execution, delivery and performance of this Agreement, the borrowings under
the  Note,  and the execution, delivery and performance of the loan documents by
Debtors  have  been  duly authorized by all requisite action on the part of each
Debtor  and  will  not  violate the constituent documents of any Debtor, and the
execution,  delivery  and  performance of this Agreement, the Note and any other
loan documents to which each Debtor is a party will not violate any provision of
law,  any order of any court or governmental agency, and will not conflict with,
result  in  a breach of the provisions of, constitute a default under, or result
in  the  imposition  of  any  lien, charge or encumbrance upon the assets of any
Debtor  pursuant  to  the  provisions of any indenture, mortgage, deed of trust,
franchise,  permit, license, note, or other agreement or instrument to which any
Debtor  is  now  a  party.

     3.08     LITIGATION AND JUDGMENTS. There is no action, suit, or proceeding,
              ------------------------
at  law or in equity, or by or before any governmental authority, pending or, to
the  knowledge  of  any  Debtor,  threatened against or affecting such Debtor or
involving the validity or enforceability of any of the loan documents, which, if
adversely  determined,  would  have  a  material adverse effect on the financial
condition  of  such  Debtor  or  the  ability  of  such  Debtor  to  perform its
obligations  as  contemplated  by  this  Agreement.  There  are  no  outstanding
judgments  against  any  Debtor.

     3.09     CHIEF  EXECUTIVE  OFFICES.  The  chief  executive  offices of each
              -------------------------
Debtor are located at the address set out in the preamble to this Agreement, and
no  Debtor  will,  without  prior  written notice to Secured Party, relocate its
chief  executive  offices.

     3.10     SOLVENCY.  Each Debtor is solvent, able to pay its debts generally
              --------
as  such  debts  mature, and has capital sufficient to carry on its business and
all businesses in which it is engaged. The saleable value of each Debtor's total
assets  at  a  fair  valuation, and at a present fair saleable value, is greater
than  the  amount of such Debtor's debt. No Debtor will be rendered insolvent by
the  execution  or  delivery  of this Agreement or of any of the other financing
agreements or by the transactions contemplated hereunder or thereunder.


                              SECTION 4. COVENANTS

     Debtors covenant and agree for the benefit of Secured Party as follows:

     4.01     COVENANTS  CONTAINED  IN  OTHER  CREDIT  DOCUMENTS.  All  of  the
              --------------------------------------------------
covenants  of  Debtors  and  conditions of lending set forth in any other credit
documents  (including,  without  limitation,  the Commitment Letter) or security
instruments  pertaining  to  or  securing  the  Note  are


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incorporated  herein  by  reference  and  are made a part hereof as set forth in
full,  and  are  made  again  by  Debtors herein with Secured Party and shall be
performed  and  observed by Debtors at all times hereafter under this Agreement.

     4.02     FURTHER  ASSURANCES.  Debtors will, at their expense, do, execute,
              -------------------
acknowledge  and  deliver all and every further acts, conveyances, transfers and
assurances  necessary  or  proper for the creation and/or perfection of the lien
and  security interests being herein provided for in the Collateral, whether now
owned  or  hereafter  acquired.

     4.03     PRESERVATION  OF  COLLATERAL.  Debtors  will  take  any  actions
              ----------------------------
necessary  to preserve the Collateral in its condition as of the date hereof and
will not sell, exchange, lease or pledge any of the Collateral or consent to the
creation  of or existence of any security interest or other lien (other than the
security  interests and the liens created by this Agreement upon the right, tide
and  interest  of any Debtor in, to and under the Collateral or any pan thereof,
and  will,  at their own expense, warrant and defend the title to the Collateral
against  all  claims  and  demands  of  any  other  persons  to  the Collateral.

     4.04     INSURANCE.  Debtors  will  immediately,  at  their expense, insure
              ---------
(continue  to  insure)  the  Collateral  with  a  reputable  insurance  company
acceptable  to  Secured  Party against loss or damage by fire, hazards including
within  the term "extended coverage," theft and such other risk as Secured Party
may  designate  for  an amount not less than the amount of the Note, or the full
insurable value of such Collateral, whichever is less, and Debtors will keep the
Collateral  insured  continuously  until the Note is paid in full and satisfied,
with  loss  payable clause in favor of Secured Party as its interest may appear,
and  Debtors will deliver the policies of insurance to Secured Party, or furnish
other  proof  of  such insurance satisfactory to Secured Party. In case of loss,
Secured  Party  shall  be  entitled  to  receipt for insurance proceeds (and the
issuer  of  such policy or policies is hereby authorized and directed by Debtors
to  make  all payments thereunder directly to Secured Party); provided, however,
that  for  so  long  as Debtors are not in default hereunder, or under any other
document  pertaining  to  or  securing  the  Note, Secured Party will permit the
application  of  the  insurance  proceeds  to  the repair and replacement of the
Collateral after receiving proof satisfactory to Secured Party of such repair or
replacement.  In  case of loss, and should Debtors then be in default hereunder,
or  under  the Commitment Letter, or under any other credit document or security
instrument  pertaining  to  or  securing the Note, Secured Party may retain from
such  insurance  proceeds  an amount equal to the unpaid balance of the Note. If
Debtors default in any of its obligations under this Article, Secured Party may,
at  its  option, place and pay for such insurance and the amount paid by Secured
Party,  with  interest  thereon,  shall  be  an additional obligation of Debtors
hereunder  and  under  the  Note.

     4.05     TAXES.  Debtors  shall  pay  promptly,  when  due,  all  taxes and
              -----
assessments  upon  the  Collateral  or  for  its  use  or operation or upon this
Agreement.


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     4.06     PLACE OF BUSINESS.  Each Debtor will promptly notify Secured Party
              -----------------
of  any  change  in  the  location  of  its principal place of business or chief
executive  office  and  of  the establishment (and location) of any new place of
business.

     4.07     INSPECTION.  Secured  Party shall at all times have free access to
              ----------
and the right of inspection of any part or all of the Collateral and any records
of  Debtors (and the right to make extracts from such records) and Debtors shall
deliver  to  Secured  Party  the  originals  or  true  copies of such papers and
instruments  relating  to  any  or  all  of  the Collateral as Secured Party may
request  at  any  time.

     4.08     RECORDATION  AND FILING. Debtors will cause this Agreement and all
              -----------------------
supplements  or  amendments  thereto,  and/or  all  financing  and  continuation
statements  and  similar  notices required by applicable law, at all times to be
kept  recorded and filed at its own expense in such manner and in such places as
maybe  requested  by  Secured  Party  in order to fully preserve and protect the
rights  of  Secured  Party  hereunder,  and will at their own expense furnish to
Secured  Party  promptly  after the execution and delivery of this Agreement and
any  supplement  or  amendment thereto an opinion of counsel stating that in the
opinion  of  such counsel this Agreement or such supplement or amendment, and/or
all  financing  and  continuation  statements  and  similar  notices required by
applicable  law,  as  the  case may be, have been properly recorded or filed for
record  so as to make effective of record, and to perfect, the lien and security
interest  intended to be created hereby. Without limiting the foregoing, Debtors
hereby  authorize  Secured  Party to file a financing statement and continuation
statement  in the office of each public official deemed necessary or appropriate
by  Secured Party or Secured Party's counsel to perfect or continue the security
interest(s)  herein  granted.

     4.09     OTHER  INDEBTEDNESS;  FUTURE ADVANCES. In addition to securing the
              -------------------------------------
Note,  the  security interest(s) granted hereby, notwithstanding anything to the
contrary  which  may  be herein otherwise contained, also secures payment of any
and  all  extensions,  renewals  and  modifications of the Note, and any and all
other  indebtedness  of  Debtors  to  Secured  Party,  whether  now  existing or
hereafter  incurred.

     4.10     AFTER-ACQUIRED  PROPERTY.  Any  and  all  property  described  or
              ------------------------
referred  to  in  the granting clauses hereof which is hereafter acquired shall,
without  any  further conveyance, assignment or act on the part of any Debtor or
Secured  Party,  become  and be subject to the lien and security interest herein
granted as fully and completely as though specifically described herein.

     4.11     FINANCIAL  STATEMENTS.  As  soon  as  available,  and in any event
              ---------------------
within  90  days after the close of each fiscal year of each Debtor, each Debtor
will  provide  Secured  Party  with copies of the consolidated and consolidating
balance  sheets  of  such  Debtor  as  of  the close of such fiscal year and the
respective  statements  of  income,  retained earnings, cash flow and changes in
financial


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position of each Debtor for such fiscal year. In addition, as soon as available,
and  in any event within 20 days after the end of each fiscal year quarter, each
Debtor  will  provide  Secured  Party  with  copies  of  the  consolidated  and
consolidating  balance  sheets  of  such  Debtor as of the end of such financial
quarter, and statements of income and retained earnings and changes in financial
position  of  each  Debtor for such financial quarter, all in reasonable detail,
and  certified  by  the chief financial officer of each Debtor as being true and
correct;  provided,  if  the  fact that any Debtor is a publicly traded  company
would,  pursuant  to  applicable  SEC  rule  or  regulation  or other applicable
governmental  authority  rule or regulation, prevent it from delivering all or a
portion of such financial information within the stated time period, such Debtor
shall  have an additional period of time within which to submit such information
in  order  to  comply  with  any  applicable  SEC  or other governmental rule or
regulation.

     4.12 PRESERVATION OF EXISTENCE AND CONDUCT OF BUSINESS. Each Debtor will do
          -------------------------------------------------
or  cause to be done all things necessary to preserve and keep in full force and
effect all patents and all other licenses or rights necessary to comply with all
laws, regulations, rules, statutes or other provisions applicable to each Debtor
in  the  operation  of  its  respective  business.


                          SECTION 5. POWER OF ATTORNEY.

     Each  Debtor  does  hereby irrevocably constitute and appoint Secured Party
its  true  and  lawful attorney with an interest and full power of substitution,
for  it  and  in  its  name,  place  and stead to: (i) ask, collect, receive and
receipt  for  any  and  all  income (and other sums which are assigned under the
granting  clauses  hereof)  and  to  endorse  the  name  of  such  Debtor on all
commercial  paper  given in payment or in part payment thereof; and (ii) without
limiting  the provisions of the foregoing clause (i) hereof, to make all waivers
and  agreements,  to  give and receive duplicate copies of all notices and other
instruments  or  communications which such Debtor is or may be entitled to under
any  documents constituting the Collateral, and to sue for, to settle, adjust or
compromise  any  claim  for  any  and  all such income and other sums which were
assigned  under the granting clauses hereof as fully as such Debtor could itself
do,  and  in  its  discretion  to  file  any claim, and take any other action or
proceedings, either in its own name, or in the name of such Debtor or otherwise,
which  Secured  Party  may deem necessary or appropriate to protect and preserve
the right, title and interest of Secured Party in and to such other sums and the
security  intended  to be afforded hereby, it being the intention and purpose of
the  parties  hereto  that  the assignment and transfer to Secured Party of said
rights,  powers  and privileges shall be effective and operative immediately and
shall  continue in full force and effect at all times during the period from and
after  the  date  of  this  Agreement  until  the  Note  has been fully paid and
discharged;  provided  specifically, however, said rights, powers and privileges
shall  not  be  exercised by Secured Party unless an Event of Default shall have
occurred  under  the  Commitment Letter or any other credit document or security
instrument.


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                        SECTION 6. DEFAULTS AND REMEDIES.

     6.01     EVENTS  OF DEFAULT. Any of the following occurrences or acts shall
              ------------------
constitute  an  "EVENT  OF  DEFAULT"  under  this  Agreement:

          (a)     Default  in  the payment of any installment of principal of or
interest  on  the  Note  within  ten  (10)  days  of  its  due  date;  or

          (b)     Default  on  the  part  of  Debtor  in  the  due observance or
performance of any covenant or agreement to be observed or performed by it under
this  Agreement  or  the  Commitment Letter, and any such default shall continue
unremedied  for  thirty (30) days (or such shorter period as may be specified in
the  Commitment  Letter)  after  written  notice  (if  same  is  required by the
Commitment  Letter)  from  Secured  Party  to  Debtor specifying the default and
demanding  the  same  to  be  remedied;  or

          (c)     If any fact or warranty made in this Agreement or in any other
instrument  or  document  delivered  hereunder  or in connection herewith should
prove  to  be  untrue  in  any  material  respect, as of the date made, and such
default  continues  for thirty (30) days after written notice thereof to Debtors
by  Secured  Party;  or

          (d)     Default  by  Debtors  in  the performance or observance of any
other  covenant,  term  or agreement contained herein and such default continues
for  thirty  (30) days after written notice thereof to Debtors by Secured Party;
or

          (e)     Occurrence  of  any  event  or condition which constitutes, or
upon  the  lapse  of  time or the giving of notice, or both, would constitute, a
default  or  event of default under the Security Agreement or any other security
instrument or other instrument or document delivered by Debtors to Secured Party
at any time, or any other default by Debtors in the performance or observance of
any covenant, term or agreement contained in any such instrument or document and
such  occurrence  continues  beyond  the period of time granted by said security
instrument  for  curing  said  default;  or

          (f)     Occurrence  of  any  event  or condition which constitutes, or
upon  the  lapse  of  time or the giving of notice, or both, would constitute, a
default  or  an  event  of  default  under  any  other  agreement or evidence of
indebtedness  relating  to  any  obligation  of  Debtors  for borrowed money, or
failure by Debtors to pay under any obligation for borrowed money to which it is
a  party  or  which  purports  to be binding upon any of them and the occurrence
continues  for  ten (10) days after written notice thereof to Debtors by Secured
Party.  Nothing herein shall prohibit any Debtor from contesting, in good faith,
any  third  party  claim  of  a  default;  or

          (g)     Adjudication  by  a  court  of competent jurisdiction that any
Debtor  is bankrupt or insolvent or the appointment of a receiver for any Debtor
or  for  all  or  any  part  of  its  properties;


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          (h)  Filing  by  any  Debtor  or by any of its creditors of a petition
under  the  provisions  of  the  United States Bankruptcy Code as now enacted or
hereafter  amended;

          (i)  Making  by  any Debtor of a general assignment for the benefit of
creditors  or  an  admission  in  writing  by  any  Debtor  of  inability to pay
indebtedness;  or

          (j)  Any merger or consolidation of Debtor OnSite Technology L.L.C. or
any  direct or indirect sale, transfer or disposition of the membership units of
Debtor  OnSite  Technology  L.L.C.; or

          (k)  The dissolution or termination of the existence of any Debtor; or

          (1)  There  should  occur  a  material adverse change in the financial
condition  of  any  Debtor;  or

          (m)  Any  other  Event  of  Default  under the Commitment Letter, this
Agreement  or  any other credit document or security instrument pertaining to or
securing  the  Note.

     6.02  SECURED  PARTY'S RIGHTS. Debtors agree that when any Event of Default
           ------------------------
has  occurred,  Secured  Party shall, without limitation of all other rights and
remedies  available  at  law  or in equity, have the rights, options, duties and
remedies  of  a secured party, and Debtors shall have the rights and duties of a
debtor,  under the Uniform Commercial Code as adopted by the State of Texas, and
without  limiting the foregoing, may exercise any one or more or all, and in any
order,  of  the remedies set forth herein, it being expressly understood that no
remedy  or  remedies  shall  be  exclusive;  but  each and every remedy shall be
cumulative and shall be in addition to every other remedy given herein or now or
hereafter  existing  at  law  or  in  equity  or  by  statute.

          (a)     Secured  Party  may,  by notice in writing to Debtors, declare
the  entire  unpaid  balance  of  the Note to be immediately due and payable and
thereupon  all  such unpaid balance, together with all accrued interest thereon,
shall  be  and  become  immediately  due  and  payable.

          (b)     Secured  Party  personally,  or  by agents or attorneys, shall
have  the  right  (subject  to compliance with any applicable mandatory legal or
regulatory  requirements)  to use, manage and control the Collateral and collect
and  receive  all  earnings, revenues, rents, issues, proceeds and income of the
Collateral  and every part thereof and may otherwise exercise any and all of the
rights  and  powers  of  Debtors  in  respect  thereof.

          (c)     Secured  Party  may,  if at any time such action may be lawful
and  always  subject  to  compliance  with  any  mandatory  legal  or regulatory
requirements,  either  with  or  without  taking possession and either before or
after  taking  possession,  and  without  instituting  any  legal


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proceedings whatsoever, and having first given notice of such sale by registered
mail  to  Debtors at least ten (10) days prior to the date of such sale, and any
other  notice  which maybe required by law, sell and dispose of said Collateral,
or  any  part  thereof,  or  interest  therein, at public auction to the highest
bidder,  either  for  cash  or  on credit and on such terms as Secured Party may
determine, and at any place (whether or not it be the location of the Collateral
or  any  part  thereof)  designated  in the notice referred to. Any such sale or
sales  maybe  adjourned  from time to time by announcement at the time and place
appointed  for  such  sale  or  sales,  or for any such adjourned sale or sales,
without  further  notice,  and Secured Party may bid and become the purchaser at
any  such  sale.

          (d)     Secured  Party  may  proceed  to  protect  and  enforce  this
Agreement  and/or  the Note by suit or suits or proceedings in equity, at law or
in  bankruptcy,  and  whether  for  the  specific performance of any covenant or
agreement  herein  contained or in execution or aid of any power herein granted,
or for foreclosure here under, or for the appointment of a receiver or receivers
for  the Collateral or any part thereof, or for the recovery of judgment for the
loan  evidenced by the Note or for the enforcement of any other proper, legal or
equitable  remedy  available  under  applicable  law.

          Nothing  contained  in  this  Section  shall  negate  the  arbitration
provisions  set  out  in  the  Commitment  Letter.

     6.03     ACCELERATION  CLAUSE.  In  case  of  any sale or assignment of the
              --------------------
Collateral, or of any part thereof, by any Debtor or pursuant to any judgment or
decree  of  any  court or otherwise in connection with the enforcement of any of
the  terms  of this Agreement, the principal of the Note, if not previously due,
and  the  interest  accrued  thereon  and  all other sums required to be paid by
Debtors  pursuant to this Agreement, shall at once become and be immediately due
and  payable.

     6.04     EFFECT OF SALE.  Any  sale, whether under any power of sale hereby
              --------------
given  or  by virtue of judicial proceedings, shall operate to divest all right,
title,  interest,  claim  and  demand whatsoever, either at law or in equity, of
Debtors  in  and  to the property sold and shall be a perpetual bar, both at law
and  in  equity,  against  Debtors, their respective successors and assigns, and
against  any  and  all  persons  claiming  the property sold or any part thereof
under,  by  or  through  Debtors,  their  respective  successors  or  assigns.

     6.05     APPLICATION  OF  SALE  AND  OTHER  PROCEEDS.  The  purchase  money
              -------------------------------------------
proceeds  and/or  avails of any sale of the Collateral, or any part thereof, and
the proceeds and the avails of any remedy hereunder shall be paid to and applied
as  follows:

          First, to the payment of costs and expenses of foreclosure or suit, if
     any,  and  of  such  sale,  and  of  all  proper  expenses, liabilities and
     advances,  including  legal  expenses and attorneys' fees, incurred or made
     hereunder  by Secured Party and of all taxes, assessments or liens superior
     to  the  lien  of  these  presents,  except any taxes, assessments or other
     superior  liens  subject  to  which  said  sale  may  have  been  made;


<PAGE>
SECURITY AGREEMENT
Page  11
-------------------

          Second,  to  the  payment of the whole amount then due, owing and
     unpaid  upon  the  Note  for  principal, interest and premium, if any;

          Third,  to  the payment of any other Note that remain unpaid; and

          Fourth,  to  the payment of the surplus, if any, to Debtor OnSite
     Technology L.L.C., its successors and assigns, or to whomsoever may be
     lawfully  entitled  to  receive  the  same.

     6.06     DISCONTINUANCE  OF  REMEDIES.  In  case  Secured  Party shall have
              ----------------------------
proceeded  to enforce any right under this Agreement by foreclosure, sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any  reason or shall have been determined adversely, then and in every such case
Debtors and Secured Party shall be restored to their former positions and rights
hereunder  with  respect  to  the  Collateral  subject  to the lien and security
interest  created  under  this  Agreement.

     6.07     CUMULATIVE  REMEDIES.  No  delay  or  omission of Secured Party to
              --------------------
exercise any right or power arising from any default shall exhaust or impair any
such  right  or  power  or  prevent  its exercise during the continuance of such
default.  No waiver by Secured Party of any such default, whether such waiver be
full  or  partial, shall extend to or be taken to affect any subsequent default,
or  to  impair the rights resulting therefrom except as maybe otherwise provided
therein. No remedy hereunder is intended to be exclusive of any other remedy but
each and every remedy shall be cumulative and in addition to any and every other
remedy given hereunder or under the Commitment Letter or otherwise existing; nor
shall  the  giving,  taking  or enforcement of any other or additional security,
collateral  or  guaranty for the payment of the Note operate to prejudice, waive
or  affect  the  security  of  this  Agreement or any rights, powers or remedies
hereunder,  nor  shall  Secured  Party  be required to first look to, enforce or
exhaust  such  other  or  additional  security,  collateral  or  guaranties.


                       SECTION 7. SUPPLEMENTAL AGREEMENTS.

     Debtors and Secured Party from time to time and at any time, subject to the
restrictions  set  forth  in  this  Agreement,  shall enter into an agreement or
agreements  supplemental  hereto, as Secured Party may request, which thereafter
shall  form  a part hereof for any one or more or all of the following purposes:

          (a)  to  execute  any  additional documents in connection with Secured
     Party's  perfection  and/or  continuance  of  the  security interest herein
     granted,  including,  but not limited to, any documents which Secured Party
     shall  deem  necessary for the recording of its security interest in any of
     the  Collateral;


<PAGE>
SECURITY AGREEMENT
Page  12
-------------------

          (b)  to  subject  to  the  lien  of this Agreement additional property
     hereafter  acquired  by Debtors and intended to be subjected to the lien of
     this  Agreement  and to correct and amplify the description of any property
     subject  to  the  lien  of  this  Agreement.

          (c)  for  any  other  purpose  not inconsistent with the terms of this
     Agreement,  or  to  cure  any  ambiguity or cure, correct or supplement any
     defect  or inconsistent provisions of this Agreement or any supplement; and

Debtors covenant to perform all requirements of any such supplemental agreement.
No  restriction  or  obligation  imposed  upon  Debtor  may, except as otherwise
provided  in  this  Agreement,  be  waived  or  modified  by  such  supplemental
agreements,  or  otherwise.


                            SECTION 8. MISCELLANEOUS.

     8.01     SUCCESSORS  AND  ASSIGNS.  Whenever  any  of the parties hereto is
              ------------------------
referred  to,  such  reference  shall  be  deemed  to include the successors and
assigns of such party; and all of the representations, warranties, covenants and
agreements  in  this  Agreement  contained by or on behalf of Debtor or by or on
behalf  of  Secured  Party shall be binding upon and inure to the benefit of the
respective  successors  and assigns of such parties whether so expressed or not.

     8.02     COMMUNICATIONS. All communications provided for herein shall be in
              --------------
writing. Communications to Debtors or Secured Party shall be deemed to have been
given (unless otherwise required by the specific provisions hereof in respect of
any  matter)  when  addressed  and  delivered  as  follows:

     If  to  Debtors:       OnSite  Technology  L.L.C.
                            2600  South  Loop  West,  Suite  645
                            Houston,  Texas  77054
                            Attention:   James  S.  Percell
                            Facsimile:   (713) 641-0756

                            Environmental  Safeguards,  Inc.
                            2600  South  Loop  West,  Suite  645
                            Houston,  Texas  77054
                            Attention:   James  S.  Percell
                            Facsimile:   (713)  641-0756


<PAGE>
SECURITY AGREEMENT
Page  13
-------------------

                            National  Fuel  &  Energy,  Inc
                            2600 South Loop West, Suite 645
                            Houston, Texas 77054
                            Attention:   James  S.  Percell
                            Facsimile:   (713)  641-0756


     If to Secured Party:   Rineco  Recycling,  LLC
                            c/o Harry C. Erwin, III
                            P.O. Box 24855
                            Little Rock, Arkansas  72221
                            Facsimile:   (501) 868-7750

     with a copy to:        Rineco  Recycling,  LLC
                            P.O.  Box  2800
                            Benton,  Arkansas  72018-2800
                            Attention:   Steven M. Keith
                            Facsimile:   (501) 778-8897


or  to  Debtors or Secured Party at such other address as any Debtors or Secured
Party  may designate by notice duly given in accordance with this Section to the
other  party.

     8.03     RELEASE.   Secured Party shall release this Agreement and the lien
              -------
and  security  interest  granted hereby by proper instrument or instruments upon
presentation  of  satisfactory  evidence  that  the  Note has been fully paid or
discharged.

     8.04     COUNTERPARTS.  This  Agreement  may  be executed, acknowledged and
              ------------
delivered  in any number of counterparts, each of such counterparts constituting
an  original  but  all  together  only  one  agreement.

     8.05     GOVERNING  LAW.   This  Agreement shall be construed in accordance
              --------------
with  and  governed  by  the  substantive  laws  of  the  State of Texas and any
applicable  federal  laws;  provided,  nothing  herein shall affect the parties'
designation  in  the Note that the laws of the State of Texas shall govern as to
all  matters  relating  to  the  maximum amount of interest which may be charged
thereon.

     8.06     JURISDICTION AND VENUE.  With  respect to any claim arising out of
              ----------------------
this Agreement, each party irrevocably submits to the non-exclusive jurisdiction
of  the  courts  of  the State of Arkansas, and the United States District Court
located  in  the  City  of Little Rock, Pulaski County, Arkansas, and each party
hereby also irrevocably waives any objection which it may have at anytime to the
laying  of venue of any suit, action or proceeding arising out of or relating to
this  Agreement


<PAGE>
SECURITY AGREEMENT
Page  14
-------------------

brought  in  any  such  court.  Each party hereby further irrevocably waives any
claim  that  any  such  suit, action or proceeding brought in any such court has
been  brought  in  an  inconvenient  forum,  and irrevocably waives the right to
object,  with  respect  to such claim, suit, action or proceeding brought in any
such  court,  that  such  court  does  not  have  jurisdiction  over such party.

     8.07     CAPTIONS. Captions used in this Agreement are for convenience only
              --------
and  shall not be construed in interpreting this Agreement. Whenever the context
shall  require,  the  masculine  shall  include the feminine and neuter, and the
singular  shall  include  the  plural,  and  conversely.  If any portion of this
Agreement  shall  be  held invalid or inoperative, then, so far as is reasonable
and  possible,  the  remainder  of  this Agreement shall be considered valid and
operative  and  effect  shall  be given to the intent manifested by the portion,
held  invalid  or  inoperative.

     8.08     INCORPORATION OF RECITALS AND EXHIBIT(S). All of the preambles and
              ----------------------------------------
all  of  the  recitals  set  forth  in  this Agreement  are  made a part of this
Agreement.  In  addition,  any  and  all  exhibits  to this Agreement are hereby
specifically made a part of and incorporated into this Agreement.

     8.09     COORDINATION WITH OTHER LOAN DOCUMENTS.   The benefits, rights and
              --------------------------------------
remedies  of  Secured  Party  contained  herein  or  in the Commitment Letter or
provided  for in any of the other loan documents executed in connection herewith
are,  as  provided  in  Section  6.07  above,  cumulative.  To the extent of any
conflict  between any provision of this Agreement and any provision contained in
any  of the other loan documents executed in connection herewith, the provisions
of this Agreement shall control, except that any provision of any other document
giving  the  greater  security or additional rights and remedies to Lender shall
control  over  this  Agreement.

                         DEBTORS:

                         ONSITE  TECHNOLOGY  L.L.C.,
                         an  Oklahoma  limited  liability  company

                         By:  /s/  James S. Percell
                            --------------------------------------
                         Name:   James  S.  Percell

                         Title:  President



<PAGE>
SECURITY AGREEMENT
PAGE  15
-------------------

                         ENVIRONMENTAL  SAFEGUARDS,  INC.,
                         a  Nevada  corporation

                         BY:  /s/  James S. Percell
                            ----------------------------------------
                         NAME:   James S. Percell

                         TITLE:  President



                         NATIONAL  FUEL  &  ENERGY,  INC.,
                         a  Wyoming  corporation

                         BY:  /s/  James S. Percell
                            ----------------------------------------
                         Name:   James  S.  Percell

                         Title:  President



                         SECURED  PARTY:

                         RINECO  RECYLCING,  LLC,
                         an Arkansas  limited  liability  company

                         By  its  Manager:

                         RINECO  CHEMICAL  INDUSTRIES,  INC.,
                         an  Arkansas  corporation


                         By:  /s/  Michael L. Spinks
                            ----------------------------------------

                         Name:   Michael L. Spinks
                              --------------------------------------

                         Title:  V.P. of Admin, CFO
                               -------------------------------------


<PAGE>
SECURITY AGREEMENT
Page  16
-------------------

                                 ACKNOWLEDGMENTS
                                 ---------------

STATE  OF  TEXAS          )
                          )  ss.
COUNTY  OF  HARRIS        )

     ON  THIS  DAY before me, the undersigned Notary Public, personally appeared
the within named JAMES S. PERCELL, to me personally well known, who acknowledged
himself  to  be  the  President of ONSITE TECHNOLOGY L.L.C., an Oklahoma limited
liability  company,  and  further  stated  that  he,  in  such  capacity,  being
authorized  to do so, executed the foregoing instrument for the purposes therein
contained,  by  signing  the  name  of  said  limited  liability  company as its
President.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 20th
                                                                            ----
day  of  March,  2003

[GRAPHIC  OMITTED]                      /s/  Tanya  McGinnis
                                        ----------------------------------------
TANYA McGINNIS                          NOTARY  PUBLIC
Notary Public, State of Texas           My Commission Expires:   8/10/06
                                                              ----------
My Commission Expires  8/10/2006




STATE  OF  TEXAS          )
                          )  ss.
COUNTY  OF  HARRIS        )

     On  this  20th  day  before  me,  the undersigned Notary Public, personally
               ----
appeared  the  within  named  JAMES S. PERCELL, to me personally well known, who
acknowledged  himself  to be the President of  ENVIRONMENTAL SAFEGUARDS, INC., a
Nevada  corporation, and that he was duly authorized in said capacity to execute
the foregoing instrument for and in the name and behalf of said corporation, and
further  stated  and  acknowledged that he had so signed, executed and delivered
said  foregoing  instrument for the consideration, uses and purposes therein set
forth.

     IN WITNESS WHEREOF, I have hereunto set my hand and seal.


[GRAPHIC  OMITTED]                       /s/  Tanya  McGinnis
                                         ---------------------------------------
TANYA McGINNIS                           NOTARY  PUBLIC
Notary Public, State of Texas            My Commission Expires:   8/10/06
                                                                ----------
My Commission Expires  8/10/2006


<PAGE>
SECURITY AGREEMENT
Page  17
-------------------

                                 ACKNOWLEDGMENTS
                                 ---------------

STATE  OF  TEXAS          )
                          )  ss.
COUNTY  OF  HARRIS        )

     On this 20th day of March, 2003 before  me,  the undersigned Notary Public,
             ----
personally  appeared  the  within  named JAMES S. PERCELL, to me personally well
known,  who  acknowledged himself to be the President of NATIONAL FUEL & ENERGY,
INC.,  an  Wyoming corporation, and that he was duly authorized in said capacity
to  execute  the  foregoing  instrument  for  and in the name and behalf of said
corporation, and further stated and acknowledged that he had so signed, executed
and delivered said foregoing instrument for the consideration, uses and purposes
therein  set  forth.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

[GRAPHIC  OMITTED]                        /s/  Tanya  McGinnis
                                          --------------------------------------
TANYA McGINNIS                            NOTARY  PUBLIC
Notary Public, State of Texas             My Commission Expires:   8/10/06
                                                                 ----------
My Commission Expires  8/10/2006



STATE  OF  TEXAS          )
                          )  ss.
COUNTY  OF  HARRIS        )

     ON  THIS  DAY before me, the undersigned Notary Public, personally appeared
the  within  named  Michael  Spinks,  Jr.,  to  me  personally  well  known, who
                   ----------------------
acknowledged  himself to be the VP of Admin and CFO of RINECO RECYCLING, LLC, an
                                -------------------
Arkansas  corporation,  and  who  stated that said corporation is the Manager of
RINECO RECYCLING, LLC, an Arkansas limited liability company, and further stated
that  he,  in  such  capacity, being authorized to do so, executed the foregoing
instrument  for  the  purposes  therein  contained,  by signing the name of said
limited  liability  company  as  such  Manager.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 20th
                                                                            ----
day  of  March,  2003.

[GRAPHIC OMITTED]                          /s/  Tanya  McGinnis
                                           -------------------------------------
TANYA  McGINNIS                            NOTARY  PUBLIC
Notary Public, State of Texas              My Commission Expires:   8/10/06
                                                                  ----------
My Commission Expires  8/10/2006


<PAGE>