WARRANT CERTIFICATE

NEITHER THE WARRANT REPRESENTED BY THIS CERTIFICATE NOR THE COMMON STOCK
ISSUABLE UPON THE EXERCISE HEREOF HAS BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND NEITHER MAY BE
TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER SUCH ACT AND ANY APPLICABLE
STATE SECURITIES LAW UNLESS AN EXEMPTION FROM REGISTRATION IS THEN AVAILABLE.

                        WARRANT TO PURCHASE COMMON STOCK

                                       OF

                                U S LIQUIDS INC.
                              Date: January 2, 1998

      This is to certify that, FOR VALUE RECEIVED, the registered holder hereof,
GLENN A. PRATT (the "Holder"), is entitled to purchase, subject to the
provisions of this Warrant Certificate, from U S LIQUIDS INC., a Delaware
corporation (the "Company"), up to 10,000 shares (as such number may be adjusted
in accordance with Section 6 hereof) of the Company's Common Stock, $0.01 par
value (such class of stock, together with any capital stock of the Company into
which such class of stock shall be converted, being referred to herein as the
"Stock"), at $14.125 per share (the "Exercise Price"). The number of shares of
Stock to be received upon the exercise of this Warrant and the Exercise Price
shall be adjusted from time to time as hereinafter set forth. The shares of
Stock or other securities or property deliverable upon such exercise, as
adjusted from time to time, are hereinafter sometimes referred to as "Warrant
Shares." Unless the context otherwise requires, the term "Warrant" or "Warrants"
as used herein includes this Warrant and any other Warrant or Warrants which may
be issued pursuant to the provisions of this Warrant, whether upon transfer,
assignment, partial exercise, divisions, combinations, exchange or otherwise,
and the term "Holder" includes any registered transferee or transferees or
registered assignee or assignees of the Holder, who in each case shall be
subject to the provisions of this Warrant, and when used with reference to
Warrant Shares, means the holder or holders of such Warrant Shares.

      SECTION 1. EXERCISE OF WARRANT. Subject to the terms and conditions of
this Warrant Certificate, this Warrant may be exercised in whole or in part at
any time or from time to time during the period commencing on the date hereof
and ending 5:00 P.M., Houston, Texas time, on January 2, 2003 (the "Expiration
Date"), by presentation and surrender to the Company at its principal office of
this Warrant and the Purchase Form annexed hereto duly executed and accompanied
by payment in cash, by wire
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transfer or certified or official bank check payable to the order of the Company
in the amount of the Exercise Price for the number of Warrant Shares specified
in such form. If this Warrant is exercised in part only, the Company shall,
promptly after presentation of this Warrant upon such exercise, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the Warrant Shares purchasable hereunder upon the same terms and
conditions as herein set forth. This Warrant is exercisable only in increments
of 1,000 Warrant Shares, unless the total number of Warrant Shares then issuable
under this Warrant is less than 1,000, in which event this Warrant must be
exercised in full for all Warrant Shares issuable hereunder. Upon and as of
receipt by the Company at its office, in proper form for exercise and
accompanied by payment as herein provided, the Holder shall be deemed to be the
holder of record of the shares of Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Stock shall not then be
actually delivered to the Holder.

      Notwithstanding anything to the contrary contained in this Warrant
Certificate, the Holder may elect to exercise this Warrant in whole or in part
by receiving Warrant Shares equal to the value (determined below) of this
Warrant (or any part thereof), upon surrender of this Warrant (or any part
thereof) at the principal office of the Company, together with notice of such
election, specifying the part of this Warrant so surrendered, in which event the
Company shall issue and deliver to the Holder the number of Warrant Shares
determined using the following formula:

            X           =     (Y) (A-B)
                              ---------
                                  A

where

            X           =     the number of  Warrant  Shares to be
                              issued to the Holder;

            Y           =     the   number   of   Warrant   Shares
                              purchasable  under the  Warrant,  or  portion of
                              the Warrant, surrendered;

            A           =     the Current Market Price per share of the Stock,
                              determined pursuant to Section 3 of this Warrant
                              Certificate; and

            B           =     the then current Exercise Price per share of
                              Stock.

      SECTION 2. RESERVATION OF SHARES. The Company shall at all times after the
date hereof and until the Expiration Date reserve

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for issuance and delivery upon exercise of this Warrant the number of Warrant
Shares as shall be required for issuance and delivery upon exercise in full of
this Warrant.

      SECTION 3. FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied by
the Current Market Price of such fractional share. For purposes of this Warrant
Certificate, the "Current Market Price" per share of Stock at any date shall be
the average of the daily closing prices for the five consecutive trading days
commencing ten trading days before such date. The closing price for each day
shall be the last reported sale price, regular way or, in case no such reported
sale takes place on such day, the average of the closing bid and asked prices,
regular way, for such day, in either case on the principal national securities
exchange on which the Stock is listed or admitted to trading, or if the Stock is
not listed or admitted to trading on any national securities exchange, but is
traded in the Nasdaq National Market ("NNM"), or if the Stock is otherwise a
security for which transaction reports are required to be made on a real-time
basis pursuant to an effective transaction reporting plan under Rule 11a3-1 of
the rules under the Securities Exchange Act of 1934, as amended, the last
reported sales price or, if the Stock is not listed or admitted to trade, and if
last sale data is not then available from NNM, but the Stock is traded in the
over-the-counter market, the average of the representative closing bid and asked
quotations for the Stock on NNM or any comparable system, or if the Stock is not
listed on NNM or a comparable system, the average of the closing bid and asked
prices as furnished by two members of the National Association of Securities
Dealers, Inc. selected from time to time by the independent members of the Board
of Directors of the Company for that purpose.

      SECTION 4.  TRANSFER, EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT.

            4.1 This Warrant may not be assigned or transferred except as
provided herein and in accordance with and subject to the provisions of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (said Act and such rules and regulations being hereinafter
collectively referred to as the "Act"). Any purported transfer or assignment
made other than in accordance with this Section 4 shall be null and void and of
no force and effect.

            4.2 This Warrant may be transferred or assigned only upon the
opinion of counsel satisfactory to the Company, which may be counsel to the
Company, that (i) the transferee is a person to whom the Warrant may be legally
transferred without registration under the Act, and (ii) such transfer will not
violate any applicable law or governmental rule or regulation including,

                                      -3-
<PAGE>
without limitation, any applicable federal or state securities law. Each
certificate for Warrant Shares or for any other security issued or issuable upon
exercise of this Warrant shall contain a legend, in form and substance
satisfactory to the Company, setting forth the restrictions on transfer thereof.

            4.3 Any assignment permitted hereunder shall be made by surrender of
this Warrant to the Company at its principal office with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax. In
such event the Company shall, without charge, execute and deliver a new Warrant
in the name of the assignee named in such instrument of assignment and designate
the assignee as the registered holder on the Company's records and this Warrant
shall promptly be cancelled. This Warrant may be divided or combined with other
Warrants which carry the same rights upon presentation thereof at the principal
office of the Company together with a written notice signed by the holder
thereof, specifying the names and denominations in which new Warrants are to be
issued.

            4.4 Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification to the
Company or (in the case of mutilation) presentation of this Warrant for
surrender and cancellation, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.

      SECTION 5. WARRANT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. The Holder
shall not, solely because of holding this Warrant, be entitled to vote, receive
dividends or be deemed the holder of Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Warrant for any
purpose whatsoever, nor shall anything contained herein be construed to confer
upon the Holder, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matters submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise), or to receive notice of
meetings or other actions affecting stockholders, or to receive dividend or
subscription rights, or otherwise, until such Warrant Certificate shall have
been exercised in accordance with the provisions hereof and the receipt by the
Company of the Exercise Price and any other amounts payable upon such exercise.

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<PAGE>
      SECTION 6.  ADJUSTMENT IN THE NUMBER OF WARRANT SHARES  PURCHASABLE AND
EXERCISE PRICE.

            6.1 The number of shares of Stock for which this Warrant may be
exercised shall be subject to adjustment as follows:

                  (a) in the event there is a subdivision or combination of the
outstanding shares of Stock into a larger or smaller number of shares, the
number of shares of Stock for which this Warrant may be exercised shall be
increased or reduced in the same proportion as the increase or decrease in the
outstanding shares of Stock.

                  (b) if the Company declares a dividend on Stock payable in
Stock or securities convertible into Stock, the number of shares of Stock for
which this Warrant may be exercised shall be increased, as of the record date
for determining which holders of Stock shall be entitled to receive such
dividend, in proportion to the increase in the number of outstanding shares of
Stock as a result of such dividend;

                  (c) if the Company decides to offer rights to all holders of
Stock which entitle them to subscribe to additional Stock or securities
convertible into Stock, the Company shall give written notice of any such
proposed rights offering to the Holder at least fifteen (15) days prior to the
proposed record date in order to permit the Holder to exercise this Warrant on
or before such record date. There shall be no adjustment in the number of shares
of Stock for which this Warrant may be exercised or the Exercise Price by virtue
of such rights offering or by virtue of any sale of any class of securities of
the Company pursuant to such rights offering.

            6.2 In the event at any time prior to the expiration of this Warrant
of any reorganization or reclassification of the outstanding shares of Stock
(other than a change in par value, or from no par value to par value, or from
par value to no par value, or as a result of a subdivision or combination) or
any consolidation or merger of the Company with another entity, or the sale,
lease or transfer of all or substantially all of the property or assets of the
Company, the Holder shall have the right, but not the obligation, to exercise
this Warrant. Upon such exercise, the Holder shall have the right to receive the
same kind and number of shares of stock and other securities, cash or other
property as would have been distributed to the Holder upon such reorganization,
reclassification, consolidation or merger had the Holder exercised this Warrant
immediately prior to such reorganization, reclassification, consolidation or
merger. The Holder shall pay upon such exercise the Exercise Price that
otherwise would have been payable pursuant to the terms of this Warrant. If any
such reorganization, reclassification, consolidation or merger results in a cash
distribution in excess of the Exercise Price provided by

                                      -5-
<PAGE>
this Warrant, the Holder may, at the Holder's option, exercise this Warrant
without making payment of the Exercise Price, and in such case the Company
shall, upon distribution to the Holder, consider the Exercise Price to have been
paid in full, and in making settlement to the Holder, shall deduct an amount
equal to the Exercise Price from the amount payable to the Holder.

            6.3 If the Company shall, at any time prior to the expiration of
this Warrant, dissolve, liquidate or wind-up its affairs, the Holder shall have
the right, but not the obligation, to exercise this Warrant. Upon such exercise
the Holder shall have the right to receive, in lieu of the shares of Stock that
the Holder otherwise would have been entitled to receive, the same kind and
amount of assets as would have been issued, distributed or paid to the Holder
upon any such dissolution, liquidation or winding-up with respect to such shares
of Stock had the Holder been the holder of record of such shares of Stock
receivable upon exercise of this Warrant on the date for determining those
entitled to receive any such distribution. If any such dissolution, liquidation
or winding-up results in any cash distribution in excess of the Exercise Price
provided for by this Warrant, the Holder may, at the Holder's option, exercise
this Warrant without making payment of the Exercise Price and, in such case, the
Company shall, upon distribution to the Holder, consider the Exercise Price to
have been paid in full and in making settlement to the Holder shall deduct an
amount equal to the Exercise Price from the amount payable to the Holder.

            6.4 The Company may retain a firm of independent public accountants
of recognized standing (who may be any such firm regularly employed by the
Company) to make any computation required under this Section 6, and a
certificate signed by such firm shall be conclusive evidence of the correctness
of any computation made under this Section.

            6.5 Whenever the number of shares of Stock purchasable upon the
exercise of this Warrant is adjusted as herein provided, the Exercise Price
shall be adjusted by multiplying the applicable Exercise Price immediately prior
to such adjustment by a fraction, the numerator of which shall be the number of
shares of Stock purchasable upon exercise of this Warrant immediately prior to
such adjustment and the denominator of which shall be the number of shares of
Stock purchasable immediately after such adjustment.

      SECTION 7. NOTICE TO HOLDER. So long as this Warrant shall be outstanding,
(i) if the Company shall pay any dividend or make any distribution upon the
Stock otherwise than in cash, or (ii) if the Company shall offer to the holders
of Stock for subscription or purchase by them any shares of any class of stock
of the Company or any other rights, or (iii) if there shall be any capital
reorganization of the Company, reclassification of the capital stock of the
Company, consolidation or merger of the Company with

                                      -6-
<PAGE>
or into another corporation, sale, lease or transfer of all or substantially all
of the property and assets of the Company, or voluntary or involuntary
dissolution, liquidation or winding up of the Company, then in any such event,
the Company shall cause to be mailed by certified mail to each Holder, at least
30 days prior to the relevant date of the event described above, a notice
containing a brief description of the proposed action and stating the date or
expected date on which a record is to be taken for the purpose of such dividend,
distribution or rights, or the date or expected date such reclassification,
reorganization, consolidation, merger, conveyance, lease or transfer,
dissolution, liquidation or winding up shall take place or be voted upon by
holders of the Stock of record, and the date or expected date as of which the
holders of Stock of record shall be entitled to exchange their shares of Stock
for securities or other property deliverable upon any such event.

      SECTION 8. RULE 144. The Company shall take all actions reasonably
necessary to enable the Holder to sell the Warrant Shares without registration
under the Act within the limitation of the exemptions provided by (a) Rule 144
under the Act, as such Rule may be amended from time to time, or (b) any similar
rule or regulation hereafter adopted by the Commission including, without
limiting the generality of the foregoing, filing on a timely basis all reports
required to be filed by the Securities Exchange Act of 1934, as amended. Upon
the written request of the Holder, the Company will deliver to the Holder a
written statement as to whether it has complied with such requirements.

      SECTION 9. DISPOSITION OF WARRANT SHARES. The stock certificates of the
Company that will evidence the Warrant Shares or any other security issued or
issuable upon exercise of this Warrant will be imprinted with a conspicuous
legend in substantially the following form:

      The securities represented by this Certificate have not been registered
      under either the Securities Act of 1933 (the "Act") or applicable state
      securities laws (the "State Acts") and may be sold, pledged, hypothecated,
      donated or otherwise transferred (whether or not for consideration) by the
      holder only if registered under the Act and any applicable state acts or
      in a transaction exempt from such registrations.

      SECTION  10.   GOVERNING   LAW.  This  Warrant  shall  be  construed  in
accordance  with  the  laws of the  State of  Texas  applicable  to  contracts
executed and to be performed wholly within such state.

      SECTION 11. NOTICE. Any notice, demand or document given or delivered
hereunder shall be in writing, and may be personally delivered or given or made
by United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

                                      -7-
<PAGE>
IF TO COMPANY:                U S Liquids Inc.
                              411 N. Sam Houston Parkway East
                              Suite 400
                              Houston, Texas 77060
                              Attn: Chief Financial Officer

IF TO HOLDER:                 Glenn A. Pratt
                              ______________________________________
                              ______________________________________

The Company and the Holder shall each have the right to designate a different
address for itself by notice similarly given. Any notice, demand or document so
given, delivered or made by United States mail shall be deemed to have been
given or delivered or made on the third day after the same is deposited in the
United States Mail as registered or certified matter, addressed as above
provided, with postage thereon fully prepaid and return-receipt requested.

      SECTION 12. WILL BIND  SUCCESSORS.  This  Warrant  will be binding  upon
any corporation  succeeding to the Company by merger,  consolidation  or other
operation of law.

      SECTION 13. SUCCESSORS AND ASSIGNS. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors of the
Company and the heirs, personal representatives, successors and permitted
assigns of the Holder.

      SECTION  14.  AMENDMENT.  This  Warrant  may be  modified or amended and
any provision  hereof may be waived only by a writing  executed by the Company
and the Holder.

      SECTION  15.  HEADINGS.   Section  headings  in  this  Warrant  are  for
reference only and shall not affect the meaning or  construction of any of the
provisions hereof.

      SECTION 16. EARLY TERMINATION OF WARRANT. Notwithstanding anything to the
contrary in this Warrant Certificate, if that certain Consulting Agreement,
dated as of January 2, 1998, between US Liquids Northeast, Inc. ("Northeast"), a
wholly-owned subsidiary of the Company, and Glenn A. Pratt is terminated by
Northeast for cause pursuant to Section 6 thereof, this Warrant and/or any new
Warrant issued pursuant to Section 1 or Section 4 hereof shall cease to be
exercisable and shall become void and all rights of the Holder hereunder and/or
thereunder shall cease.


             [The remainder of this page left blank intentionally]

                                      -8-
<PAGE>
      IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first above written.

                                          U S LIQUIDS INC.



                                          By:___________________________
                                             Name:______________________
   Title:_____________________


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                                  PURCHASE FORM


                                                 Dated _______________, 19____

      The undersigned hereby irrevocably elects to exercise the within Warrant
to the extent of purchasing ________ shares of Stock and hereby makes payment of
$________ in payment of the actual Exercise Price thereof.


                     INSTRUCTIONS FOR REGISTRATION OF STOCK


Name___________________________________________________________________
                 (Please typewrite or print in block letters)


Address________________________________________________________________
       ________________________________________________________________



                                       Signature:______________________


Dated:  _____________________, 199___

                                      -10-
<PAGE>
                                 ASSIGNMENT FORM

      FOR VALUE RECEIVED, _______________________________________ hereby sells,
assigns and transfers unto Name____________________________________________
                               (Please typewrite or print in block letters)

Address _____________________________________________________________ the
_________________________________ right to purchase Stock represented by this
Warrant to the extent of shares of Stock and does hereby irrevocably constitute
and appoint _____________________________ , attorney, to transfer the same on
the books of the Company with full power of substitution in the premises.



                                       Signature:______________________________


Dated:____________________________, 199___