SECURITIES AND
EXCHANGE
COMMISSION
Washington, D.C.
20549
                     
FORM 10-K
[X]  ANNUAL  REPORT  PURSUANT  TO SECTION  13  OR
     15(d)  OF  THE SECURITIES EXCHANGE ACT OF 1934
     [FEE REQUIRED]
For the fiscal year ended December 31, 1997
                         OR
[]   TRANSITION  REPORT PURSUANT TO SECTION 13 OR
15(d)  OF  THE
     SECURITIES EXCHANGE ACT OF 1934 [NO FEE
REQUIRED]

For the transition period from      to

Commission file number                  0-19761
              OP-TECH Environmental Services, Inc.
    (Exact name or registrant as specified in its charter)
                          
Delaware                                           91- 1528142
State  or other jurisdiction                     (I.R.S Employer
of incorporarion or organization                Identification No.)

6392 Deere Road, Syracuse, NY                        13206 
(Address of principal executive offices)          (Zip Code)


Registrant's telephone number, including area
code 315-463-1643

Securities registered pursuant to section 12(b)
of the Act:

Title  of  each  class    Name or each
exchange  on  which registered

         None

 Securities registered pursuant to Section 12(g) of the Act:
                          
                  Common Stock, $.01 par value
                        (Title of class)
                          
      Indicate by check mark whether the registrant
(1) has filed all  reports required to be filed by
Section 13 or 15(d)  of  the Securities  Exchange Act
of 1943 during the preceding  12  months (or  for
such shorter period that the registrant was required
to file  such  reports),  and (2) has been subject
to  such  filing requirements for the past 90 days.
Yes  X  or No

      Indicate  by check mark if disclosure of
delinquent  filers pursuant to item 405 of regulation
S-K (Section 229.405  of  this chapter)  is not
contained herein, and will not be contained,  to the
best  of  registrant's knowledge,  in  definitive
proxy  or information statements incorporated by reference in
Part  III  of this Form 10-K or any amendment to this
Form 10-K [X].
      The aggregate market value of the voting stock
held by nonaffiliates  of  the Company as of March
15, 1998  was  $2,888,781 based  upon the average bid
and ask price of such stock  on  such day.
     (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
      Indicate  the number of shares outstanding of
each  of  the Company's classes of common stock, as
of March 15, 1998.   Common Stock, $.01 par value.
11,555,123
                       PART I
ITEMS 1. BUSINESS

General

      OP-TECH Environmental Services, Inc. and
Subsidiaries  (the "Company"),   a   Delaware
corporation  provides   comprehensive environmental
services  predominately in  Upstate,  Central  and
Eastern   New  York  and  Massachusetts.   The
Company  performs industrial cleaning of non-
hazardous materials, provides  varying services
relating  to plant facility closure including
interior and exterior demolition as well as asbestos
removal services.  In addition,  the  Company
provides remediation services  for  sites
contaminated  by  hazardous  materials  and  provides
24   hour emergency spill response services.  The
majority of the Company's revenues are derived from
industrial companies and Municipalities facing
complex  environmental clean-up problems associated
with hazardous  materials as required by the New York
State Department of  Environmental  Conservation
(NYSDEC)  and  the  Massachusetts Department  of
Environmental Protection.  The Company's  services
include  assessing  the regulatory, technical,  and
construction aspects  of the environmental issue,
developing a strategic  plan to  solve  the
environmental issue, and performing the  necessary
remediation activities.  The Company seeks to provide
its clients with remedial solutions which integrate
the various aspects of  a project  and are well-
documented, practical, cost effective,  and
acceptable  to regulatory agencies and the public.
Through  its affiliation  with  O'Brien & Gere
Limited Inc.  and  Subsidiaries ("Limited"), the
Company has an available resource of experienced
engineers, scientists, construction professionals and
attorneys.

SERVICES

Asbestos Abatement

     The Company provides asbestos abatement
contracting services to  the public and private
sectors.  The Company has expertise in all  types of
asbestos abatement including removal, disposal  and
enclosure  and encapsulation.  Asbestos removal is
performed  in commercial  buildings,  industrial
facilities  and  governmental buildings.

Interior Demolition/Structural Dismantling

      The Company provides  interior demolition
services  such as removing walls, ceilings and
flooring.  In addition, the  Company offers
structural dismantling services with experience in
razing concrete, wood and steel structures, concrete
and brick  chimneys and concrete piers and
foundations.

On-Site Industrial and Waste Management Services

      The  Company provides on-site industrial
cleaning and waste management  services.
Specialized services  for  the  handling, processing
and  disposal of hazardous  wastes  are  provided  by
vacuuming, soda blasting, hydroblasting, dredging,
dewatering and sludge  processing, sludge pumping,
chemical  cleaning  and  tank cleaning.

Transportation and Disposal Services

      The  Company provides transportation of
hazardous and  nonhazardous  wastes  from  customer
sites  to  customer  designated landfills,  disposal
facilities and the  Company's  own  Aqueous Treatment
Facility.  The Company also provides liquid tank
truck transports equipped with vacuum pumps.

Excavation and Site Remediation Services

      The  Company provides excavation and soil
blending services for treatment of contaminated soil
using heavy equipment such  as excavators,  loaders
and  a  large soil  blender.   The  Company primarily
provides on-site soil blending to public utilities
and municipal customers.

Hydrogeological/Drilling Services

      The  Company provides hydrogeological services
to petroleum companies, engineering firms and local
and state public  entities through  the use of
qualified subcontractors.  Through performing
hydrogeological assessments, the Company evaluates
and determines the need for ground water remediation
systems, pump and treatment systems and sub-surface
petroleum product recovery.  In addition, the
Company provides air sparging systems, long term
remediation system operations and maintenance as well
as monitoring well  and recovery well installations.

24 Hour Emergency Spill Response

     The Company undertakes environmental remediation
projects on both  a  planned and emergency basis.
Emergency response actions may  develop  into
planned remedial action projects  when  soil,
groundwater,    buildings,   or   facilities   are
extensively contaminated.   The  Company  has
established  specially  trained emergency  response
teams.  Many of the Company's decontamination and
mitigation activities result from a response to an
emergency situation  by  one  of its response teams.
These  incidents  can result  from  transportation
accidents  involving  chemical   or petroleum
substances, fires at chemical facilities or
hazardous waste sites, transformer fires or
explosions involving PCB's, and other  unanticipated
developments.  The substances  involved  may pose  an
immediate threat to public health or  the
environment, such  as possible groundwater
contamination.  The Company has  an agreement with
the NYSDEC to provide emergency response  services in
Upstate,  Central and Western New York, payment of
which  is guaranteed by the NYSDEC.

      Emergency  response projects require trained
personnel  who are  equipped with protective gear and
specialized equipment  and are prepared to respond
promptly whenever these situations occur. The
Company's  health and safety specialists and  other
skilled personnel  closely supervise these projects
during and subsequent to  the  clean-up process.  The
steps performed  by  the  Company include  rapid
response,  containment  and  control  procedures,
sampling  for  analytical testing and assessment,
neutralization and treatment, collection and
transportation of the substance  to an appropriate
treatment or disposal facility.

Aqueous Treatment Facility
      The  Company operates an aqueous treatment
facility at  the Company's Massena, New York
location.  The facility provides  for the  clean-up
of  contaminated water and its eventual  discharge
into  the  St.  Lawrence River.  The facility
services  both  the Company,  its clients and outside
vendors.  Construction  of  the facility  was
completed in September, 1992 and has seen increased
use as a result of receiving a Part 360 permit from
the State  of New York.
Overall   Site  Assessment  and  Implementation  of
Remediation
Services

      Hazardous  Waste:  The Company's hazardous
waste  projects include  the  design  and
construction of on-site  facilities  to monitor,
isolate, or contain hazardous wastes existing in
surface and  subsurface water; the transport of
contaminated  soils;  the decontamination  of
equipment  and  facilities  related  to  the
production  and use of hazardous materials,
industrial  cleaning, building demolition and
asbestos removal.  Although the Company's projects
vary  widely  in objective, scope  and  duration,
each project  involves  the  Company providing  one
or  more  of  the following  services through the use
of its own resources  or  the resources  of selected
subcontractors:  strategic planning;  site
reconnaissance   and  security;  remedial
evaluation;   clean-up evaluation;  design,
construction and operation of facilities  to treat,
stabilize, or isolate the hazardous materials; and
closure planning and monitoring.

      Strategic  Planning:  On each of its projects,
the  Company attempts  as early as possible, to
formulate a complete  strategy for  directing  all
efforts toward solving the  hazardous  waste problem.
The Company's strategic plans are designed to
satisfy the  demands  of  regulatory agencies and the
public,  sometimes under  emergency conditions.
Additionally, the Company  attempts to  balance  the
cost of the alternatives against  risks  to  the
client   associated  with  potential  litigation  or
unfavorable publicity.   Through strategic planning,
the Company attempts  to minimize  expenditures that
will not lead to complete  solutions, and  to enhance
the clients' credibility with regulatory agencies and
the public.

      Site  Reconnaissance and Security:  In
conducting  a  site reconnaissance,  the  Company
makes  a  general  assessment to
determine the basic characteristics of a site and the
limitations imposed  thereby, climatological
considerations and the proximity and degree  of
residential  development.   In  providing  site
security,  the Company's services include assessing
the hazardous condition, restricting access to the
affected area, assisting  in the preparation of any
necessary evacuation plans, eliminating or reducing
potential  risks  of fire or explosion,  containing
or removing  hazardous materials which might pose
additional  risk, and  implementing  measures  to
reduce  or  halt  the  spread  of hazardous
substances into adjacent areas.

      Remedial Evaluation:  A remedial investigation
involves the detailed  assessment of an affected area
to determine the  nature and extent of hazardous
materials present.  This is often done at the
request  of one or more regulatory agencies.  In
conducting such  an  investigation, the Company
performs  numerous  physical tests.   A remedial
investigation also involves the study of  the
geologic, and hydrogeologic characteristics of the
affected  area and  the surrounding environment and a
determination of the risks posed by the hazardous
materials determined to be located in  the affected
area.  In conducting such investigations,  the
Company often reviews the construction of a facility and past
storage and handling  practices regarding hazardous
materials.   The  Company has  the capability of
removing and replacing underground storage tanks.
     Clean-up Evaluation:  A feasibility study
addresses measures which may be implemented to remove
hazardous wastes from a site,
to  treat,  stabilize  or  contain  such  wastes  on-
site  or  to otherwise  mitigate  their  effects.
Such  studies  take   into account,  among  other
things, available technology,  regulatory
considerations  and the cost-benefit relationship of
alternative measures.    Additionally, the Company
reviews  the  project  and alternative  remedial
measures in  light  of  legitimate  public concerns.

      Design, Construction, and Operation of Remedial
Facilities: Based on the results of remedial
investigations and feasibility
studies,  the  Company  uses   its  scientific  and
construction expertise  directly,  or  through
subcontractors  to  design  an appropriate structure
or system for use at a particular site, and performs
the necessary remediation activities.  These
remediation activities might include such diverse
measures as construction of a  slurry  wall to
contain the hazardous materials,  construction and
operation of a pumping and filtration system to
decontaminate surface or subsurface waters or
construction and operation of  an integrated system
to excavate contaminated soil and remove it  to a
licensed disposal facility.

       Closure   Planning  and  Site  Monitoring:
The  Resource Conservation  and  Recovery  Act of
1976  ("RCRA")  requires  the planning  of closure
and postclosure monitoring for all  licensed secure
hazardous  landfills, treatment facilities,  and  on-
site hazardous  waste storage areas.  The Company
plans  and  performs facility  closures  and
postclosure monitoring  programs.   While certain
monitoring requirements are mandated by RCRA, many
sites have, at  some  time,  contained  hazardous
wastes  which  also frequently  require monitoring.
The Company provides  monitoring for sites and the
corresponding data management services.
     The Company usually contracts for and manages
all aspects of the  work related to the completion of
a particular project.   In addition,  the  Company
performs all aspects  of  the  work  and certain
other  specialized  operations,  some  of   which
are subcontracted  to  other  parties.  The  Company
does,  however, occasionally,  contract  to perform
only  certain  aspects  of  a particular project.
The Company has submitted a number  of  bids for
projects with other members of Limited.
Technologies Employed

     The Company utilizes a wide variety of physical
and chemical treatment  technologies in performing
its remediation activities. Physical treatment
technologies generally involve filtration  and
aeration  techniques and are used to separate
contaminants  from soils,   slurries  or  water.
Chemical  treatment  technologies generally  involve
flocculation,  clarification,  precipitation, polymer
addition,  chemical oxidation, chemical  absorption
and stabilization.   Depending on the contaminants
present  and  the site characteristics,  these
technologies  are  combined  into
integrated    treatment   systems   which   reduce
contaminant concentrations  to  levels consistent
with prescribed  regulatory standards.

Regulation

      The  business of the Company and its clients is
subject  to extensive,  stringent  and evolving
regulation  by  the  EPA  and
various other federal, state and local environmental
authorities. These  regulations directly impact the
demand  for  the  services offered  by the Company.
In addition, the Company is subject  to the  federal
Occupational Safety and Health Act,  which  imposes
requirements  for  employee  safety  and  health.
The   Company believes it is in substantial
compliance with all federal,  state and local
regulations governing its business.
      RCRA.  The Resources Conservation and Recovery
Act of  1976 ("RCRA")  is  the  principal federal
statute governing  hazardous waste generation,
treatment, storage and disposal.  RCRA, or EPA
approved  state programs may govern any waste
handling activities of  substance classified as
"hazardous".  The 1984 amendments  to RCRA
substantially  expanded its scope by, among  other
things,providing for the listing of additional wastes
as "hazardous" and providing  of  the  regulation of
hazardous wastes  generated  in lower    quantities
than   previously   had   been   regulated.
Additionally, the amendments impose restrictions on
land disposal of  certain hazardous wastes, prescribe
more stringent  standards for  hazardous  waste  land
disposal sites,  set  standards  for underground
storage tanks and provide for "corrective" action  at
or  near  sites of waste management units.  Under
RCRA, liability and  stringent operating requirements
may be imposed on a  person who is either a
"generator" or a"transporter" of hazardous waste, or
an  "owner" or "operator" of a waste treatment,
storage,  or disposal  facility.  The Company does
not believe  its  hazardous waste  remediation
services cause it to fall within any of  these
categories,  although it might be considered an
"operator"  of  a waste management facility of a
"generator" of hazardous waste  if it  were  to
control the collection, source, separation, storage,
transportation, processing, treatment, recovery  or
disposal  of hazardous  wastes,  including operation
of a treatment  unit  for remedial purposes.
      Regulation  of underground storage tanks (UST)
legislation, in  particular  Subtitle I of RCRA,
focuses on the regulation  of underground   tanks  in
which  liquid  petroleum  or hazardous
substances are stored and provides for the regulatory
setting for the  principal portion of the Company's
work.  Subtitle I of RCRA requires  owners of all
existing underground tanks  to  list  the age,
size, type, location and use of each tank with a
designatedstate  agency.   The EPA has published
performance standards  and financial  responsibility
requirements for storage tanks  over  a five
year period.  These regulations also require all new
tanks which are installed to have protection against
spills, overflows, and corrosion.  Subtitle I of RCRA
provides civil penalties of up to $15,000 per
violation for each day of non-compliance with tank
requirements and $10,000 for each tank for which
notification was not  given  or  was  falsified.
RCRA  also  imposes  substantial monitoring
obligations  on  parties which  generate,  transport,
treat, store or dispose of hazardous waste.
      Superfund  Act.  The Comprehensive
Environmental  Response, Compensation   and
Liability  Act  of  1980  ("Superfund Act")
generally addresses clean-up of inactive sites at
which hazardous waste  treatment, storage or disposal
took place.  The  Superfund Act  assigns joint and
several liability for cost of clean-up and damages to
natural resources to any person who, currently, or
at the  time  of disposal of a hazardous substance
who by  contract, agreement  or  otherwise arranged
for disposal or  treatment,  or arranged with a
transporter for transport of hazardous substances
owned or possessed by such person for disposal or
treatment;  and to  any person who accepts hazardous
substances for transport  to disposal or treatment
facilities or sites from which there  is  a release
or threatened release.  Among other things, the
Superfund Act  authorized the federal government
either to clean  up  these sites itself or to order
persons responsible for the situation to do so.  The
Superfund Act created a fund, financed primarily from
taxes  on  oil and certain chemicals, to be used by
the  federal government  to pay for the clean-up
efforts.  Where  the  federal government  expends
money for remedial activities  it  may  seek
reimbursement form the Potentially Responsible
Parties (PRPs).
     In October 1986, the Superfund Amendment and
Reauthorization act("SARA")   was  enacted  and  has
increased  environmental remediation  activities
significantly.  SARA  authorizes  federal
expenditures of $8.5 billion over five years, while
imposing more stringent  clean-up  standards and
accelerated  timetables.
Therequirements of SARA are expected to add 1,600 to
2,000 sites  to the national priority list.  Within
36 months of the enactment of SARA,  remedial
investigation and feasibility studies were to  be
conducted for at least 275 national priority list
sites, and were this  not  achieved  for at least 650
sites  within  five  years. Physical  on-site
remedial work was to be commenced for at  least 175
new  sites  in  the  36 months after enactment  and
for  an additional  200  sites  in the following 24
months.   SARA  also contains provisions which expand
the EPA's enforcement powers and which  are expected
to encourage and facilitate settlements  with PRPs.
The  Company  believes  that,  even  apart  from
funding authorized  by  SARA,  industry and
governmental  entities  will continue to try to
resolve hazardous waste problems due to  their need
to  comply with other statutory and regulatory
requirements and to avoid liabilities to private
parties.
      The  liabilities provided by the Superfund Act
could, under certain  factual circumstances, apply to
a broad rage of possible activities by the Company,
including generation of transportation of
hazardous  substances,  releases  of  hazardous
substances,
failure  to properly design a clean-up, removal or
remedial  plan and  failure to achieve required clean-
up standards,  leakage  of removed wastes intransit
or a the final storage site and remedial operations
on ground water.  Such liabilities can be  joint  and
several where other parties are involved.

      Other.   The  Company's operations  are
subject  to  other federal  laws  protecting the
environment,  including  the  Clean Water Act and the
Toxic Substances Control Act.

      Many  states  have  also  enacted statutes
regulating  the handling  of hazardous substances,
some of which are broader  and more stringent than
the federal laws and regulations.

Competitive Conditions

      The  markets  for  environmental remediation,
as  well  as demolition   and  asbestos  removal,
have  become increasingly competitive.   The  Company
competes with  many  different  firms ranging  from
small local firms to large national firms  some  of
which  have  greater financial and marketing
resources  than  the Company.  Competition in
environmental services is based  largely on
competitive  pricing and quality of service provided.
Other competitive  factors  include  geographic
location  as  well  as reputation.  Management
believes the Company is one  of  the  few firms
based  in  the Central and Upstate New  York  Region
that offers  a  high quality combination of
environmental services  at the most competitive
prices.  In addition, through its wide range of
environmental  services,  good  reputation  and
competitive pricing, the Company hopes to maintain a
competitive edge in  the environmental services
business.
      The  Company  operates field offices in
Syracuse,  Massena, Rochester  and Albany New York as
well as Braintree Massachusetts with   an additional
office in Canada.  While operations  in  the Syracuse
and Massena offices are substantial, the Rochester
and Albany  and  Braintree  offices  operate  on  a
skeleton  staff. Operations in Canada have been
minimal since inception.
Seasonality
      Typically  during the first quarter of each
calendar  year there  is  less demand for
environmental remediation due  to  the cold  weather,
particularly in the Northeast and Midwest regions. In
addition,  factory closings for the year-end holidays
reduce the  volume of industrial waste generated,
which results in lower volumes  of waste handled by
the Company during the first quarter of the following
year.
Customers
      The  Company's  client base includes industrial
companies, real   estate  developers,  auto  parts
manufacturers,  aluminum producers,  utilities, waste
disposal firms,  municipalities  and engineering
firms.  During 1997, the Company performed  services
for more than 250 clients.  These projects ranged
from short-term (three  months or less) to projects
which were on  going  for  12 months or more.  The
majority of the projects were short-term  in nature
and  continue to provide a substantial amount of
revenue for the Company.  During 1997, sales to
subsidiaries of O'Brien & Gere   Limited   (an
affiliated  party)  totalled  approximately
$1,507,364 or 22% of the Company's revenues.
Insurance
     The Company maintains commercial general
liability insurance which  provides aggregate
coverage limits of $5.0  million. The
Company   also  maintains  asbestos  liability  and
contractors pollution legal liability which provide
aggregate coverage limits of  $5.0  million
respectively.  In addition, the  Company  also
maintains  workers  compensation, comprehensive
automobile,  and Directors   and  Officers  liability
insurance.   The  Company's insurance  coverage is
consistent with the insurance requirements found in
the environmental remediation industry.

Backlog

     As of December 31, 1997, the Company had a
backlog of orders it believed to be firm of
approximately $850,000.

Employees

      As  of March 15, 1998, the Company had a total
of 65  fulltime  employees between its headquarters
in Syracuse, NY and  its branch offices in Massena,
Rochester and Albany, NY and Braintree Massachusetts.
All   employees  of  St.  Lawrence   Industrial
Services, Inc., a wholly owned subsidiary, are
covered  by  union contracts.   The Company's union
contracts are negotiated  on  an annual basis and
cover wages, vacations, working conditions,  and
fringe  benefits.   The  Company has contracts  with
two  unions locally  in  the Massena area.  No other
employees are  currently covered by union contracts.
The Company's ability to retain  and expand  its
staff will be an important factor in determining  the
Company's   future  success.  The  Company  maintains
employment contracts  with  its  key managers in its
Massena  and  Syracuse branch  offices.  Manager
contracts are negotiated on  an  annual basis  and
encompass  items such as salary,  bonuses,  and  non
compete  clauses.   The  Company  does  not  maintain
key-person insurance for such personnel. The Company
considers its relations with  its employees to be
good, and the Company has never  had  a
work stoppage or threat of a work stoppage.
ITEM 2.  PROPERTIES
      The  Company's  executive  and  branch  office
located  in Syracuse,  New  York, occupies
approximately 17,000  square  feet leased  from
O'Brien  and Gere Property Development,  a  related
party,  at  a current monthly rate of $7,167
including utilities. The  terms of the lease extend
through June 30, 1998 and does not contain an
escalation clause.
      The Company owns a 13.93 acre parcel of land
located in the Town  of  Massena, St. Lawrence
County, New York.   This  parcel, which has
approximately  1,300 feet  of  frontage  on  the  St.
Lawrence River, is located in a protected area where
the water is forty-five feet deep.  This provides
excellent dockage for  local ships      and  also
ocean going ships utilizing  the  St.  Lawrence
Seaway.

      The  land  is improved with a well maintained
concrete  and creosote timbered dock that extends
about 90 feet into the  river and  about 260 feet
along the river bed.  It is equipped with the
necessary  piping,  valves  and  fittings  to  serve
the  former Metropolitan Oil Petroleum Tank Farm.
The land is improved  with seven petroleum  tanks
that have a capacity of 472,000  barrels.
There  are four support buildings on the premises,
consisting  of an  office  building, a combination
office, shop and boiler  room building; and two
storage sheds.
     The Company is currently pursuing the sale of
all or part of its  Massena property and is currently
discussing its  sale  with several parties.  On
November 5, 1997 the Company entered into an option
with  O'Brien & Gere Property Development (an
affiliated party) for the sale of  the eastern
portion of the property,  the tanks and  the dock for
$ 2 million.  (See additional discussion
under ITEM 7 of this report).


In  March  of 1997, the Company signed a consent
order issued  by the New York State Department of
Environmental Conservation which requires the Company
to remediate its Massena, NY property.

      In  the  second quarter of 1997, the Company
began  digging test  pits  on  the  property to
determine the extent  of  ground contamination.  A
total of ten test pits were dug.  Eight of  the pits
were found to have no contamination and were closed
out  by New York State.  The remaining two pits had
low level indications of  contamination.  These areas
were excavated late in the  third quarter  of  1997.
The Company removed approximately  40  cubic yards of
contaminated material from the two pits and is
currently awaiting  final  closure  of the site by
New  York  State.   The company  also tested its
groundwater monitoring wells which  were also found
to be free of contamination therefore posing no
threat to  the  groundwater supply in the area.  The
Company  has  spent approximately $60,000 to clean
this site which has been  expensed in  1997.  As of
the date of this report, the Company is awaiting
final  closure  of  the  consent order  by  the  New
York  State Department of Environmental Conservation
and the Company believes the  extent  of the
contamination is minimal and will not  impair its
ability to sell the property.
       The  Company's  owned  equipment  consists
primarily   of construction equipment such as vacuum
trucks, tankers, forklifts, excavation equipment,
pumps, generators and compressors, some  of which
have  been  specially  modified  for  the  Company's
use.
Chemical  trailers and other specialized equipment
for short-term projects are typically leased form
local equipment contractors.
ITEM 3. LEGAL PROCEEDINGS

      With  the  exception  of the New York State
Department  of Environmental  Conservation consent
order  discussed  in  ITEM  2 above,  the  Company
is  not  a  party  to  any  litigation   or
governmental proceedings that management believes
could result in any  judgements or fines against it
or that would have a material adverse effect on the
Company or its financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

      The  Company  held  a Special Meeting  of
Stockholders  on December  26,  1997 to approve an
ammendment to the Corporation's Certificate of
Incorporation increasing the number of  shares  of
Common  Stock  from  7,500,000  to 20,000,000.
Stockholders  of record at the close of business on
November 5, 1997 were entitled to notice of and to
vote at the Special Meeting.


      The  number  of  votes cast approving the
ammendment  were 2,496,808.  The number of votes cast
against the ammendment  were 0.


ITEM  5.  MARKET  FOR  REGISTRANT'S  COMMON  EQUITY
AND  RELATED STOCKHOLDER MATTERS

 (a)  The shares of the Company's common stock are listed in
the"Pink Sheets" and on the NASDAQ Bulletin Board under the
symbol OTES.
 The  high and low bid price for the shares of the Company's
common stock of the following periods is as follows:



 Quarter Ended     High Bid    Low Bid
March 31, 1996       1 1/8       5/8
June 30, 1996        7/8         3/8
September 30, 1996   5/8         1/8
December 31, 1996    5/8         1/8
March 31, 1997       5/8         1/8
June 30, 1997        5/8         1/8
September 30, 1997   3/4         1/4
December 31, 1997    5/8         1/4
March 15, 1998       5/8         1/4

      The  aforementioned  prices  reflect  inter-
dealer  prices, without  retail  mark-up, mark down
or  commission  and  may  not necessarily represent
actual transactions.

     (b)  At March 15, 1998, there were approximately
152 holders of record of the Company's common stock.

      (c)  The Company has never paid any dividends
and does  not anticipate paying dividends for the
foreseeable future.


ITEM 6. SELECTED FINANCIAL DATA

                                   Year Ended
December 31
Statement of Operations Data
            1997      1996        1995       1994        1993 (5)
Project 
Billings $6,993,221  $5,792,548 $7,145,587 $5,143,623 $4,648,574

Extraordinary  
gain     $1,000,000      0           0         0          0

Net Loss 
from
Continuing 
Operations ($1,747,543)  ($1,553,320) ($847,037) ($1,131,139) ($587,084)      

Net Loss 
Per Share
from
Continuing 
Operations
(Basic & 
 Dilutive)   ($.32)         ($.32)       ($.17)      ($.25)      ($.20)





               1997          1996        1995        1994        1993
Balance 
Sheet Data      (5)       (1)(2) & (3) (1)(2)&(4)

Total   
Assets       $4,776,471   $5,155,409  $5,527,547   $6,269,756  $5,610,187

Long-Term    
Obligations   $120,944    $875,000    $2,326,459    $1,681,686  $3,249,620

(1)  On March 2, 1994, a shareholder of the Company
     converted its $1.0 million long-term obligation
     to Common Stock.
     
(2)  On  March 2, 1994, the Company paid off its
     subordinate debt to  a  shareholder.  The long-
     term obligation as of December 31, 1993 was
     $681,516.
     
(3)  April  6,  1994, the Company sold 170,000 shares
     of  Common Stock for $255,000.
     
(4)  On November 1, 1995, the Company converted a
     $500,000 shortterm note to a long-term obligation.

(5)  On  October 14, 1997, the Company entered into
     an  agreement with its two largest creditors to
     convert all or part of its indebtedness  into
     common stock of  the  corporation.   The
     agreement  included forgiveness of   $1,000,000
     of  debt  by O'Brien & Gere Limited (a
     shareholder) and the conversion of $  540,000 of
     convertible debentures, plus accrued interest,
     into  1,080,000  shares of the Company's Common
     Stock.   In addition,  OnBank  &  Trust  Co.
     converted  $  2,811,070  of principal  and
     interest  into  5,622,140  shares   of   the
     Company's Common Stock.
     
ITEM   7.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS
OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

      At  December  31,  1997,  the Company  had
cash  and  cash equivalents  of  $81,517 as compared
to $19,077 at  December  31, 1996.

      At  December  31, 1997, the Company had a
working  capital deficit  of  $217,156 compared to a
working  capital  deficit  of $2,978,958 at December
31, 1996, with a current ratio of .9 to  1 at  the
end of 1997 compared to .4 to 1 at the end of 1996.
The
decrease in the working capital deficit is primarily
attributable to  the conversion of debt to equity by
the Company's two largest creditors and the
foregiveness of $1,000,000 of debt.
      As  a result of recurring operating losses
during 1997, the Company's cash provided by financing
activities was due primarily to borrowings with
O'Brien & Gere Limited, (a shareholder) and  a bank.
     For the year ended December 31, 1997, the
Company's net cash used in operating activities was
$747,813 versus net cash used in operating
activities of $446,122 in 1996.  The  increasein
cash used  is  primarily  attributable to  the
increase  in  accounts receivable during the fourth
quarter of 1997.
      During  1997, the Company had capital purchases
of $195,188 which  were  financed  through operations
and  long  term  debt. Capital expenditures consisted
of a utility vehicle, dump  truck, vacuum  loader and
a laser water truck.
      On  October  14,1997, the Company entered into
a  borrowing agreement  with  a  new bank that
provided for  borrowings  on  a revolving  basis.  On
April 6, 1998 the agreement was amended  to provide
borrowings  up  to $1,000,000.  The  revolving  loan
is subject  to renewal at the banks option and is
payable on demand, or  if no demand is made
outstanding advances are due on February 16,  1999,
and are guaranteed by a shareholder for an amount
not to exceed $500,000.  Under the terms of the
guarantee, should the Bank be unable to recover the
full amount of outstanding balances from  the
Company's collateralized assets, the shareholder
agrees to purchase the Massena Port Facility for the
unrecovered balance up  to  a  maximum of $500,000.
Borrowings against the revolving loan aggregated
$500,000 at December 31,1997.
      On  October 14, 1997, the Company entered into
an agreement with  its  two largest creditors to
convert all or  part  of  its indebtedness   into
Common  Stock  of  the   Corporation.    The
agreements were executed on December 31, 1997.
YEAR  2000
      The  Company  recognizes the need to ensure its
operations will  not  be adversely impacted by year
2000 software  failures. The  Company  is  addressing
the risk  to  the  availability  and integrity of
financial systems and the reliability of operational
systems.  In 1998, the Company has upgraded its
financial systems to  comply with year 2000
requirements and has also undertaken an upgrade  of
its  headquarters information and  decision  support
systems.   The total cost of these systems projects
is  estimated
to $ 50,000 over the next 12 to 18 months.


THE MASSENA PORT FACILITY
     The Massena Port Facility is a former oil tank
farm which is located  on the St. Lawrence River in
Massena, NY.  The  property is  improved  with
several buildings and a  deep  water  docking
facility  for large ocean going ships. The property
is  still  a viable  location for a petroleum
distribution facility and  could still  function  as
one pending upgrades  of  tanks  and  diking systems
to   current   state  and  federal   guidelines.
Any improvements such as these would be treated as a
capital  expense in the year they were inccurred.
Currently, the Company uses the property  for  its
Massena branch office headquarters,  equipment
storage and its Aqueous Treatment/360 Facility.

      In  1996, the Company reclassified the Massena
Property  to Assets  Held for Sale.  
The property at that time had
a  carrying valve of approximately $ 1.9 million.
Due to the significance of the  carrying value of the
property, in March of 1997, management obtained  an
independent third party appraisal  to  support  its
carrying value.  Such appraisal included an
evaluation of similar sales plus a pending
transaction at the time.  The appraisal also included
an  evaluation of the time frame during  which  a
sale would  be  expected.   Based upon the  appraisal
report  and  an estimate  of the costs to sell,
management concluded  that  there was   no
impairment  of  the  property's  value  at  that
time. Management is currently reviewing several
options relative to the sale  and or lease of the
property however, due to the uniqueness of  the asset
and the absence of current quoted market prices  on
similar  properties,  management  anticipates  it
will  take   a prolonged period of  time to
consummate  such as sale or lease of the property.
Therefore,  the Company recognized an impairment  of
$  308,377, reducing  the  property's carrying value
to  $  1,675,000  as  of December 31, 1997.

CAPITAL RESTRUCTURING & BUSINESS OPERATIONS

The  Company  entered  into letter of  agreements
with  its  two largest  creditors, OnBank & Trust
Co.("OnBank")  and  O'Brien  & Gere  Limited ("OBG
Limited"), a shareholder on October 14, 1997, which
were executed as of December 31, 1997, whereas OnBank
and OBG  Limited agreed to convert all or part of
their indebtedness, including accrued interest, into
Common Stock of the Company, and to  forgive  the
remaining balance.  OBG Limited,  to  which  the
Company  was indebted for $1,540,000, including
accrued  interest of  $140,000,  forgave $1,000,000
of the debt and  converted  the balances  into
1,080,000 shares of the Company's  Common  Stock.
OnBank,  to  which  the  Company  was  indebted  for
$2,811,070, including  accrued interest of 75,332,
converted their  debt  and accrued  interest  for
5,622,000 shares of the  Company's  Common Stock.
The price per share, of $.50, was negotiated with the
two creditors and the Company based on the price of
recent sales  and their estimates of future risk

As  a  result  of  these  transactions the Company
has  positive shareholders' equity, and has been able
to obtain bank  financing from another financial
institution for working capital.

This  restructuring has had a significant impact not
only on  the Company's financial position, but also
on its operations and cash flows.Interest  cost  will
be reduced  from  the  $300,000  -
$400,000  per year level based on the new
capitalization  of  the Company.

The  Company is focusing on growing its operations
throughout the Northeastern  United  States  and
Pennsylvania,  two  areas  not pursued by the Company
in the past.  Secondly, a new sales  force has  been
put in place to aggressively market its core
business areas  as  well  as  expansion  areas.
Third,  the  Company  is continuing  its  focus on
its core service lines with  industrial and
governmental  customers which is expected  to  lead
to  and increase in recurring work.

In  order to achieve its 1998 budgeted revenue and
profit  goals, the  Company  believes  it  can
develop  core  service  revenues throughout the
Northeastern United States and Pennsylvania.The
Company  has relocated two of its senior employees to
the Eastern New  York  and Massachusetts regions to
build a client base  that will provide recurring core
service revenue.  With respect to its sales  force,
the Company has hired several sales representatives
throughout the New England and Pennsylvania areas to
pursue  both private industrial and governmental 
opportunities.
Based  on  its  1998 budget, the Company will have
adequate  cash flow to meet its obligations as they
come due.  Through the first two  months  of 1998 the
Company was profitable.  However,  there can be no
assurance that the Company will be able to continue
to meet its budgets and maintain adequate cash flows.



     RESULTS OF OPERATIONS
     This financial review should be read in
conjunction with the accompanying Consolidated
Financial Statements and related  notes thereto.


FACTORS THAT MAY AFFECT FUTURE RESULTS

      The Company's future operating results may be
affected by a number   of     factors,  including
the  Company's   ability   to:
successfully  increase  market  share  in  its
existing  service territory  while  expanding  its
services  into  other  markets; realize  benefits
from cost reduction programs; sell all or  part of
the Massena Property and utilize its facilities and
work force profitability in the face of intense price
competition.



     The Company's operations may be affected by the
commencement and  completion  of  major  site
remediation  projects;  seasonal fluctuations due to
weather and budgetary cycles influencing  the timing
of customers' spending for remedial activities; the
timing of  regulatory  decisions relating to
hazardous waste  management projects';  changes in
regulations governing  the  management  of hazardous
waste  and  secular changes in  the  waste
processing industry towards waste minimization and
the propensity of  delays in  the  remedial  market.
As a result  of  these  factors,  the Company's
revenue  and  income  could  vary  significantly
from quarter to quarter, and past financial
performance should not  be considered a reliable
indicator of future performance.

      The  Company's business has not been
significantly affected by inflation during the
periods discussed below.

1997 Compared to 1996

Revenues

      During  the  year  ended December 31, 1997,
the Company's revenues increased 21% to $ 6,993,221
as compared  to $ 5,792,548 reported for the previous
year  ended December  31,  1996.  A comparison of
revenues  by  service  line between  the  current
and prior year shows  the  following.  The asbestos
abatement and demolition business saw  an  increase
in revenues  of approximately $ 690,000 due to an
award of  a  large asbestos abatement project in the
fourth quarter of 1996 that was completed  in May of
1997.  The Company also saw an  increase  in revenues
of  approximately $325,000 in underground storage
tank removal  revenues.  The increase is attributable
to  the  Federal deadline  to  remove all underground
storage tanks (UST's)  which are  not  in  compliance
with the EPA guidelines for UST's.   The deadline to
remove out of compliance UST's is December 22,  1998.
The  Company expects to see a continued rise in this
service line during   1998.   Industrial  cleaning
services  remained  steady throughout  1997 as the
Company continued to focus its  marketing
efforts   in  this  area.   Emergency  Spill
Responses   revenue increased  approximately $150,000
during 1997.  The increase  was primarily
attributable to a large oil spill in January  of
1997. Finally,  the  Company saw an increase in the
transportation  and disposal  business of
approximately $100,000 as a result  of  the increased
volume of UST jobs.

Project Costs and Gross Profit
     Project costs for the year ended December 31,
1997 increased 23%  to $ 4,959,449 from $ 4,036,846
for the year ended December 31,1996.   The  increase
in  project costs  is  attributable  to increased
revenues.  The gross profit margin for the year
ended December  31,  1997  was  29% versus 30.3%  for
the  year  ended December  31, 1996.  The decrease in
the gross profit  margin  is attributable  to  an
increase in public projects which  typically produces
a lower gross profit margin than private projects.
The Company  also  continues to see increasingly
competitive  market conditions which have forced the
Company to bid jobs at  a  lower gross profit margin
than in previous years.

Selling, General and Administrative Expenses
     During the year ended December 31, 1997 selling,
general and administrative  (SG&A)  expenses
decreased  1%  to  $  2,569,486 compared to $
2,593,996 reported for the previous year.




Operating Loss
     For  the  year  ended  December  31,  1997,
the  Company's operating loss increased 13% to $
1,333,400 compared to a loss of $ 1,181,190 for the
previous year.  The increase in the operating loss
is primarily attributable to a non-cash charge of $
797,686 related  to  the write down of its Massena
Property  and  certain equipment held for use.  In
1996, the Company incurred a non-cash charge  of   $
342,896  related to the  write  down  of  certain
equipment and intangible assets.

Interest Expense
     Interest expense increased 13% to $ 402,144 in
1997 compared to  $  357,173  in  1996.  The increase
in  interest  expense  is attributable to increased
borrowings from O'Brien & Gere  Limited (a
shareholder).

Extraordinary Gains
      In connection with the capital restructuring of
the Company in 1997,  O'Brien & Gere Limited,a
shareholder forgave $1,000,000 of debt.
Net Loss
      The net loss after extraordinary gain of
$1,000,000 for the year  ended December 31, 1997 was
$ 747,543 ($.14 per share basic &  dilutive)
compared to $ 1,553,320 ($.32  per  share  basic  &
dilutive)  in  1996.  As a result of the Company's
net  operating loss, there was no provision for
federal income taxes recorded in 1997.

1996 COMPARED TO 1995
Revenues

      During  the  year  ended December 31, 1996,
the  Company's revenues  decreased  19%  to
$5,792,548  compared  to  $7,145,587 reported  for
the  previous year ended  December  31,
1995.   A comparison  of revenues by business type 
between the current  and prior  year  shows  the  following.  
The asbestos  abatement  and demolition  business
remained stable due to an award of  a  large asbestos
abatement  contract  in  the  fourth   quarter.
The hydrogeological and drilling business decreased
significantly due to the lack of enforcement of
governmental regulations during the year. The
Company   has   since  eliminated
its   in-house hydrogeological  division and is currently
subcontracting  these services  to another company.
Industrial cleaning services  rose slightly  during
the year as the Company began  to  refocus  its
marketing  effort  in this area.  The Company's
Emergency  Spill Response  revenue decreased
significantly during  1996  as  there were  fewer
emergency response calls than in 1995.  Finally,  the
Company  saw a slight decrease in the transportation
and disposal business during the year.

Project Costs and Gross Profit

     Project costs for the year ended December 31,
1996 decreased 15% to $4,036,846 from $4,756,576 for
the year ended December 31, 1995.  The decrease in
project costs is attributable primarily to decreased
revenues.  The gross profit margin for the year
ended December  31,  1996  was 30.3% versus 36.8% for
the  year  ended December  31, 1995.  The decrease in
the gross profit  margin  is attributable to
increasingly competitive market conditions  which
have  forced  the  Company to bid jobs at a  lower
gross  profit margin  than in past years.  In
addition, several large  projects during 1995
contributed to an overall higher gross profit margin.




Selling, General and Administrative Expenses

     During the year ended December 31, 1996 selling,
general and administrative expenses decreased 9.6% to
$2,593,996 compared  to $2,871,719  reported  for the
previous year  ended  December  31, 1995.   The
decrease is mainly attributable to  a  reduction  in
personnel.

Operating Loss

      For  the  year  ended  December  31,  1996,
the  Company's operating  loss increased to
$1,181,190 compared  to  a  loss  of $482,708 for
year ended December 31, 1995.  The increase  in  the
operating  loss is attributable to an overall lower
sales  volume in  1996 and a lower gross margin on
sales due to an increasingly competitive market.  In
addition, the Company incurred a non-cash charge of
$342,896 related to the write-down of certain
equipment and intangible assets during 1996.

Interest Expense

     Interest expense decreased slightly in 1996 to
$357,173 from $357,460  in  1995.   Interest expense
on short  term  borrowings increased during 1996 as a
result of an increase in the Company's line of credit
borrowings with an affiliate.

Net Loss

      The  net  loss  for the year ended December
31,  1996  was $1,553,320 ($.32 per share basic &
dilutive) compared to $847,347 ($.17  per share basic
& dilutive) in 1995.  As a result  of  the
Company's net operating loss, there was no provision
for  federal income taxes recorded in 1996.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
     The consolidated financial statements of the
Company and the report of Coopers & Lybrand L.L.P.
are submitted under Item 14 of this report.


ITEM  9.   CHANGES  IN  AND  DISAGREEMENTS  WITH
ACCOUNTANTS  ON ACCOUNTING AND FINANCIAL DISCLOSURE

     None

                      PART III

ITEM 10. DIRECTORS AND OFFICERS OF THE COMPANY

     The following table sets forth certain
information about the directors of the Company, all
of whom were unanimously elected at the Annual
Meeting of Stockholders of the registrant on
September 30, 1997 for a term of one year.






                              Year
                              First
Principal   Occupation       Elected
Certain   Other
Information

Terry L. Brown (46)
Director                      1991
Mr. Brown  has
served    in    his   present   position   as
Director    since November  1991.  He  previously
served  as  Vice  President  from November  1991  to
December 1996.  He has  served  as  President of
O'Brien  &  Gere  Technical Services  since
September  1991. He  has  served  as  a Director of
O'Brien & Gere  Limited  since August  of  1991.
From 1988 to September  1991,  he  served  as Vice
President   and  General  Manager  of   O'Brien   &
Gere Technical services.

Richard L. Elander (56)
Director                      1991                
Mr. Elander has served
in  his    present    position    as    a
Director    since November  1991.  He  has  served as 
Vice  President and  General Manager  from  June  
1994 to December 1996.  He  also  served  as Chief   
Executive Officer from November 1991 to June  1994.   
Mr. Elander served  as  a Director of O'Brien &  Gere  
Limited from August  1991  to December 1995.  From 1983 to
1996,  Mr.  Elander served as President  of O'Brien &
Gere Operations.

John R. Loveland (60)
Chairman of the Board and
Chief  Executive Officer      1994                
Mr.Loveland  has served   in   his   present  
position   since   June
1994.   He has  been a director of O'Brien & Gere
Engineers Inc. since 1973, he
served as President of O'Brien & Gere Engineers Inc.
from 1980 to December  1992.  He has been Chairman of
the Board of  O'Brien  & Gere Limited since 1989.

Cornellus B. Murphy, Jr. (52)
Director                      1991            
Mr. Murphy has served in  his
current position since December1996.
He previously served as the Company's President from
June of 1994 to  December of 1996 and Chairman of the
Board  from November  of 1991  to June 1994.  Mr.
Murphy has been a Director of O'Brien  & Gere Limited
since 1985 and   O'Brien & Gere Engineers, Inc. from
1992  to  1997.  Prior to that, Mr. Murphy served as
Senior  Vice President of  O'Brien & Gere Engineers
Inc. and Chairman  of  the Board of O'Brien & Gere
Technical Services Inc. since 1992.  From 1982  to
1992, Mr. Murphy served as President of O'Brien  &
Gere Technical Services Inc.  Mr. Murphy currently
serves as President of O'Brien & Gere Limited.


Steven A. Sanders (52)
Director                      1991        
Mr. Sanders is a partner  in  the
law firm of Beckman,Millman, and
Sanders.   Mr. Sanders served as President of the Law
Office  of Steven A. Sanders  P.C.  from 1992 to 1997.  
Prior to that,  he served  as Counsel to
Jacobs, Persinger & Parker from 1987 to 1992.  Prior
thereto, Mr. Sanders  served  as Senior Partner of
the law firm  Sanders and Srerchio.

EXECUTIVE OFFICERS OF THE COMPANY

 Name                     Age            Position Held

John R. Loveland          60        Chairman ofthe Board and
                                    Chief Executive Officer
Anthony R. Pongonis       45        President
Dennis S. Lerner          51        Secretary
Joseph M. McNulty         43        Treasurer
Christopher J. Polimino   32        Assistant Treasurer
      
      Mr.  Pongonis was hired during the fourth
quarter of  1996. He  has over twenty-five years of
experience in the environmental services market.
     
     Mr. Lerner has served his present position since
February of 1994.   Mr.  Lerner  is Assistant
Secretary  of  O'Brien  &  Gere Engineers  Inc.  a
wholly owned subsidiary  of  O'Brien  &  Gere Limited
and  serves as O'Brien & Gere Engineer's in-house
legal counsel.  He has held this position since 1990.
      
      Mr.  McNulty has served his current position
since February 1993.   Mr.  McNulty has served as
Vice President of  Finance  of O'Brien  &  Gere
Limited since April of 1995  and  serves  as  a
Director of O'Brien & Gere, Inc. of North America.

ITEM 11. Executive Compensation

The  following  table  sets forth summary information
concerning compensation paid or accrued by the
Company for services rendered during the last three
fiscal years.
Summary Compensation Table
                                       Long Term Compensation 
                 Annual                  Awards   Payments
                Compensation      
Name and                          Other             
Principal                         Annual      #     LTIP    All Other
Position         Year   Salary Compensation Options Payouts Compensation

John  R.  
Loveland         1997  $19,200    -0-       50,000   -0-       -0-
Chairman & CEO   1996  $16,800    -0-        -0-     -0-       -0-
                 1995  $24,960    -0-        -0-     -0-       -0-

Year End Option Table

The  following  table  sets forth certain information  regarding 
stock options held as of December 31, 1997 by the named 
executive officers.
                     Number of Securities     Value of Unexercised
                     Underlying Unexercised   Inthe-Money Options
  Shares             Options at F/Y/E         Options at F/Y/E (1)
  Acquired on  Value Exercisable UnexercisableExercisable Unexercisable
  Exercise #   Realized   #           #             #            #

John  
R.
Love-
land 50,000      -0-     50,000       -0-           -0-          -0-

 (1) The  options  for all Executive Officers were
     out-of-the  money  on  December 31, 1997 as the
     exercise  price  of  the options  exceeded the
     closing price of the Company's  Common Stock as
     reported by the National Quotation Bureau Inc.
     
Compensation of Directors

     Directors of the Company are paid $500 for each
quarter plus reimbursement  for  their actual
expenses incurred  in  attending meetings.  At
December 31, 1997 the Company has accrued its  1996
Directors Fees which remain unpaid.

ITEM  12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS  AND MANAGEMENT

     The following table sets forth certain
information regarding the  beneficial ownership of
the Company's Common Stock at  March 15,  1998  by
persons  who, to the knowledge  of  the  Board  of
Directors,  beneficially  own  more  than  five
percent  of  the outstanding shares of Common Stock
of the Corporation.

      All voting power of the Corporation is vested
in its Common Stock.  As of the close of business on
March 15, 1998, 11,555,123 shares of Common Stock par
value $.01 per share were outstanding. Each share of
Common Stock is entitled to one vote.

Name and Address     Number of Shares of Common    Percentage
of Beneficial Owner  Stock Beneficially Owned(1)    of Class

OnBank & Trust Co
101 S. Salina Street          5,622,140              48.6%
Syracuse, NY 13202

O'Brien & Gere Limited
5000 Brittonfield Parkway     3,148,200              27.2%
Syracuse, NY 13220

Richard L. Elander
3613 Melvin Drive South         329,365  (5)          2.9% 
Baldwinsville, NY 13027

Terry L. Brown                    3,057  (2)(5)        <1% 

Cornelius B. Murphy Jr.             667  (5)           <1%

Steven A. Sanders                 25,752 (3)(5)        <1% 

John R. Loveland                 117,093 (4)(5)        1.0% 

All Officers & Directors
as a Group (8 persons)             (2)(3)(4)(5)        4.2%

(1)   The beneficial owners have sole voting and
      investment power over the shares owned.

(2)  Includes  1,470  shares owned by Mr. Browns
     children  as  to which Mr. Brown disclaims
     beneficial ownership.

(3)  Includes 200 shares which are owned by Mr.
     Sanders' wife  as custodian  for  the  son as to
     which Mr.  Sanders  disclaims beneficial
     ownership.
     
(4)  Includes  50,000 shares issuable upon exercise
     of  currently exercisable  options.   Does not
     include  3,148,200  shares currently  owned  by
     Limited of which  Mr.  Loveland  is  a director.
     Includes 66,659 shares owned by  Mr.  Loveland's
     wife   as   to   which  Mr.  Loveland  disclaims
     beneficial ownership.
     
(5)  Director


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

      On July 1, 1995, the Company entered into a
lease agreement with O'Brien & Gere Property
Development (an affiliate) to occupy approximately
17,000 square feet of office and garage space.  The
terms  of  the  lease extend through June 30, 1998.
Total  rent expense incurred in 1997 amounted to
$89,000.

     On November 5, 1997, the Company entered into an
option with O'Brien & Gere Property Development (an
affiliated party) to sell the  eastern portion of the
Massena Property, the tanks  and  the dock for $ 2
million.

     During 1997, the Company provided $1,507,364 of
remediation, sub-contract support and project
services to subsidiaries O'Brien &  Gere  Limited, a
shareholder.  Services provided to O'Brien  & Gere
Limited subsidiaries were at competitive rates which
are bid on a project by project basis.

      The  Company purchases technical, accounting
and consulting services   from  subsidiaries  of
O'Brien  &  Gere  Limited,   a shareholder.  The
costs for these services amounted to  $  97,225 in
1997.


      The  Company had a $1,000,000 unsecured line of
credit with O'Brien & Gere Limited, a shareholder,
due on March 1, 1998.   On October   14,   1997  in
accordance  with  the  Company's   debt restructuring
plan,  O'Brien  &  Gere  Limited  forgave  the   $
1,000,000 unsecured line of credit.  Interest expense
amounted to $59,453 for 1997.

      The  Company's  revolving loan agreement is
guaranteed  by O'Brien & Gere Limited, a shareholder
for an amount not to exceed $500,000.
      
      Steven A. Sanders, a director of the Company, a
partner  of The  Law  Offices  of  Beckman, Millman
and Sanders,  P.C.  which provides  professional
services  to  the  Company,  and  it   is anticipated
that it will continue to do so.


                       PART IV
                          
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
                                                        Page
(a)  Financial Statements and Exhibits

     (1) Report of Independent Auditors.                 F-1
         Consolidated Balance Sheets at
         December 31,  1997 and 1996.                    F-2
         Consolidated  Statements of
         Operations  for  the years
         ended   December  31,  1997,  1996 and 1995.    F-3
         Consolidated  Statements of
         Shareholders'  Equity (Deficit) for the
         years ended   December 31, 1997,1996 and 1995.  F-4
         Consolidated Statements of Cash Flows for
         the years ended December 31,1997,1996 and 1995. F-5
         Notes to Consolidated Financial Statements.     F-6


          (2)   All schedules for which provision is     
          made in  the applicable accounting regulation 
          of the Securities  and Exchange Commission are not
          required under the  related instructions
          or are inapplicable, and  therefore  have
          been omitted.
          
          (21) Subsidiaries of the Company:
               St. Lawrence Industrial Services Inc.
               OP-TECH Environmental Services
               Limited - Ontario, Canada
          
(b)  Reports on Form 8-K
     The  Company  did not file any Current Reports
     on  Form  8-K during the three months ended
     December 31, 1997.
     
(c)  Exhibits

10.1 Union  and  Employment  Contracts   (1)-
     Incorporated herein  by  reference  to the Company's  Form
     10-K/A  F/Y/E December 31,1996.

10.2 Voting Agreement

10.3 Memorandum of Agreement and Exchange



                     SIGNATURES
                          
      Pursuant to the requirements of Section 13 or
15(d) of  the Securities  Exchange Act of 1934, the
Registrant has duly  caused this  report  to  be
signed on its behalf  by  the  undersigned,
thereunto duly authorized.
                                OP-TECH
Environmental  Services, Inc.
                                   (Registrant)
                              By:/s/ John R. Loveland
                              John   R. Loveland 
                             Chief Executive Officer
                                 April 15,1998

      Pursuant to the requirements of the Securities
Exchange Act of  1934,  this  report has been signed
below  by  the  following persons  on  behalf  of
the registrant  and  in  the  capacities indicated on
the 31st day of March 1998.


/s/ John R. Loveland
John R. Loveland                        Director and
                                        Chairman  of
                                        the Board(Chief 
                                        Executive Officer)


/s/ Cornelius B. Murphy, Jr.
Cornelius B. Murphy, Jr.                Director


/s/ Terry L. Brown
Terry L. Brown                          Director


/s/ Richard L. Elander
Richard L. Elander                      Director


/s/ Steven A. Sanders                   Assistant Secretary 
Steven   A.  Sanders                    and Director


/s/ Joseph M. McNulty
Joseph M. McNulty                       Treasurer


/s/ Christopher J.Polimino              Assistant Treasurer
Christopher J. Polimino












OP-TECH ENVIRONMENTAL 

SERVICES, INC. AND SUBSIDIARIES

REPORT ON AUDITED CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1997

Report of Independent Accountants

 
 

Shareholders and Board of Directors

OP-TECH Environmental Services, Inc. and Subsidiaries

 

 We have audited the accompanying consolidated balance
sheets of OP-TECH Environmental Services, Inc. and Subsidiaries
as of December 31, 1997 and 1996, and the related consolidated
statements of operations, shareholders' equity (deficit), and
cash flows for the three years in the period ended December 31,
1997.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

 We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
 We believe that our audits provide a reasonable basis for our
opinion.

 In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
consolidated financial position of OP-TECH Environmental
Services, Inc. and Subsidiaries at December 31, 1997 and 1996,
and the consolidated results of their operations and their cash
flows for the three years in the period ended December 31, 1997,
in conformity with generally accepted accounting principles.

 The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a
going concern.  As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses from
operations that raise substantial doubt about its ability to
continue as a going concern.  Management's plans in regard to
these matters are also described in Note 2.  The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.

 As discussed in Note 5 to the consolidated financial
statements, in 1996 the Company changed its method of accounting
for the impairment of long-lived assets.

 

 

 

 

 Syracuse, New York

   March 13, 1998, except as to certain

   information contained in Note 6,

   for which the date is April 6, 1998

Consolidated Balance Sheets

December 31, 1997 and 1996


ASSETS 	 	 	 	 	 	 	 	 	 	 1997 	 	 	 1996 	 

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Current assets: 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Cash and cash
equivalents 	 	 	 	 	 	  $81,517	 	  $19,077 

Accounts receivable
(net of allowance
for doubtful
accounts 	 	 	 	 	 	 	 	 		 	 	
of approximately 
$119,000 in 1997
and $33,000 in
1996): 	 	 	 	 	 	 	 	 		 	 	

Unaffiliated parties 	1,948,102     	890,028 
Affiliated parties 	 	 	126,247      658,690 
	  	 	 	 	 	 	 	 	 	 	2,074,349 	 	1,548,718 

Costs on uncompleted 
projects applicable
 to future billings 				132,590   			100,941 

Prepaid expenses 							105,792   			117,082 
Other assets   										78,653   			151,418 

Total current assets		2,472,901 			1,937,236 

														
Property and 
equipment, net										622,979 			1,234,949 

Assets held for sale		1,675,000 			1,908,677 
Other assets 	 	 	 	 	 	 	5,591   		 	74,547 
            							  $4,776,471   $5,155,409 




LIABILITIES AND SHAREHOLDERS' EQUITY(DEFICIT) 	 	 	 	 	 	 	 	 	 					

Current liabilities: 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
Bank overdraft							  $224,458 		  $74,982 
Notes payable 
to bank 	  	 	 	 	 	 	 	500,000    	971,000 
Accounts payable: 	 	 	 	 	 	 	 	 	 		 	 	
Unaffiliated parties 	1,008,236     879,084 
Affiliated parties						118,159  			112,997 
             									1,126,395  			992,081 

Billings in 
excess of costs
and estimated
profit on 
uncompleted
 contracts     									309,927 			238,063 

Accrued payroll 
and related 
liabilities 				  						272,772 			208,385 

Accrued expenses 
and other
 liabilities  										148,594 			233,562 

Current portion of 
long-term debt 									107,911		2,198,121 

Total current 
liabilities  									2,690,057		4,916,194 

Long-term debt 									120,944   			- 

Long-term notes 
payable - shareholder 					-    			875,000 

             											120,944 			875,000 

														

Shareholders' equity 
(deficit): 														

Common stock, 
par value $.01 
per share; 
authorized	20,000,000 
shares; 11,555,100 
and 4,854,497 shares
outstanding as of 
December 31, 1997 
and 1996,
respectively 		 	 	 	 	 	115,551 	 	48,535 

Additional 
paid-in capital								7,773,555	 4,491,773 
Accumulated deficit 		(5,923,636)(5,176,093) 

           						  				1,965,470 		(635,785) 

														

       						   				  $4,776,471 	$5,155,409 



The accompanying notes are an integral part of the
consolidated financial statements.

Consolidated Statements of Operations

Years Ended December 31, 1997, 1996 and 1995

 

 

 

 	 	 	 	 	 	 	 	 	 	 1997 	 	 	 1996       1995 	 

Project billings 
and services 	 	 	$6,993,221 	$5,792,548	$7,145,587 

Project costs 	 	 	4,959,449   4,036,846 	4,756,576 
Gross margin	 	 	 	2,033,772   1,755,702 	2,389,011 

Selling, general 
and administrative 
expenses          	2,569,486	 	2,593,996 	2,871,719 

Provision for 
impairment of 
long-lived assets		 	797,686 		 	342,896 		 	- 

Operating loss 	 	(1,333,400)	(1,181,190)	(482,708) 

Other income 
and expense: 																	

Interest expense 			(402,144) 		(357,173) (357,460) 

Other income
(expense), net							(11,999) 			(14,957)			(3,503) 

																	

     	    										(414,143)			(372,130) 	(360,963) 

																	

Loss before 
income taxes 
and extraordinary 
item     									(1,747,543)  (1,553,320) (843,671) 

																	

State income taxes					-          			- 	    		3,366 

																	
Loss before 
extraordinary 
item 						   			(1,747,543)			(1,553,320)		(847,037) 

Extraordinary gain 
on forgiveness 
of debt            1,000,000 	     	 	- 		     	- 

																	

NET LOSS 							  $(747,543) 		$(1,553,320) $(847,037) 

																	
Earnings per 
common share - 
basic and dilutive:
																	
Loss before 
extraordinary item				$(.32) 			     $(.32)   			$(.17) 

Extraordinary item 			  .18      			    -    			    -    

																	

Net loss     									$(.14)       		$(.32)   			$(.17) 

																	
The accompanying notes are an integral part of the
consolidated financial statements.


Consolidated Statements of Shareholders'  Equity
(Deficit)

Years Ended December 31, 1995, 1996 and 1997

 
	 	 	 	 	  	 	               	 	 	 	 	 	Additional 	 	 	 	
	 	 	     	 	 	 	 	 	 	 	 	 	Common 	 	 	Paid-in    Accumulated 	 	 	 	 
           	 	 	 	 	 	 	 	 	 	Stock 	 	 	Capital 	 	 	Deficit     	Total 	 

Balances at 
December 31, 1994 								  $48,461	   $4,480,684  $(2,775,736) $1,753,409 

Issuance of 
3,962 shares 	         										39       		4,473        -        			4,512 

Net loss  											           -             -    			(847,037)			(847,037) 

Balances at 
December 31, 1995 											48,500  			4,485,157 		(3,622,773) 			910,884 

Issuance of 
3,500 shares 					         						35       		6,616     			-        			6,651 

Net loss               											-         			-  		(1,553,320)	(1,553,320) 

																				
Balances at 
December 31, 1996 											48,535  			4,491,773			(5,176,093)			(635,785) 

																				

Conversion of debt 
to 6,702,140 shares
                     									67,021 			3,284,049    			-     			3,351,070 
Retirement of 
1,537 shares           											(5) 			(2,267)     			-        			(2,272) 

Net loss 						            					-        			- 	  		(747,543)   			(747,543) 

Balances at 
December 31, 1997 										$115,551 	$7,773,555 	$(5,923,636)		$1,965,470 

																				

The accompanying notes are an integral part of the
consolidated financial statements.

Consolidated Statements of Cash Flows

Years Ended December 31, 1997, 1996 and 1995

             	 	 	 	 	 	 	 	 	 	 1997 	 	 	 1996          1995 	 

Operating activities: 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Net loss  	 	 	 	 	 	 	 	    $(747,543) $(1,553,320) 	$(847,037) 

Adjustments to 
reconcile net loss 
to net cash	 	 	 	
(used in) provided 
by operating 
activities: 	 	 	 	
	 	 	 	 		 	 		 	 	 

Extraordinary 
gain on forgiveness 
of debt 	            						(1,000,000)      			-       			- 

Provision for 
loss on accounts 
receivable              	 	 	 	190,594 	 	 	131,290 	 	126,334 

Depreciation 
and amortization              	351,812 	 	 	486,021 	 	728,438 

Provision for 
impairment of 
long-lived assets      								716,710   			342,896    			- 

Interest expense 
converted to 
common stock           								166,836      			-       			- 

Loss on disposal 
of equipment       	 	 	 	 	 	 	 	-         	 	-   	 	 	3,770 

(Increase) decrease 
in operating
assets and	increase 
(decrease)
 in operating
 liabilities: 													

Accounts receivable    						(716,225) 			(419,049) 			338,765 

Costs on 
uncompleted 
projects	applicable 
to future billings       					(31,649)    			1,258   		(1,141) 

Prepaid expenses
and other assets          						84,055    			6,209  			(2,743) 

Billings and 
estimated profit 
in excess	of costs 
of uncompleted 
contracts                  					71,864    		88,861 			(18,221) 

Accounts payable 
and other accrued 
expenses                   					165,733 			469,712 			(19,471) 

Net cash (used in) 
provided by 
operating activities   								(747,813)		(446,122)			308,694 

																	

Investing activities: 																	

Purchases of 
property and equipment									(120,488)		(153,953)		(503,640) 

Proceeds from sale 
of property and 
equipment                       		7,793 	 	 	 - 	 	    	5,707 

Net cash used 
in investing 
activities 	            							(112,695)			(153,953)		(497,933) 

Financing activities: 	 	 	 	 	 	 	 	 	 	 		 	 		 	 	 

Cash overdrafts        										149,476 	 		74,982    			- 
Proceeds from notes 
payable to banks and  	 	 	 	 	 	
long-term borrowings, 
net of financing costs	 	 	 	 	 	511,904 	1,732,000 	 	231,621 

Proceeds from notes 
payable to shareholders 	 	 	 	 	525,000 	 	630,000 	 	140,000 

Principal payments on 
current and long-term 
borrowings            										(263,432)	(1,856,525)	(310,998) 

Proceeds from 
issuance of 
common stock              										-       			6,651  			4,512 

Net cash provided 
by financing activities 					 			922,948  			587,108 			65,135 

Increase (decrease) in 
cash and cash equivalents 								62,440  			(12,967)	(124,104) 

																	

Cash and cash equivalents 
at beginning of year   											19,077   			32,044 		156,148 

																	

CASH AND CASH EQUIVALENTS  														
AT END OF YEAR          					     $81,517 		  $19,077	 $32,044 

																	

Non-cash items: 																	
Conversion of debt
and related 
accrued interest to 
equity (including $166,836 
of 1997 interest expense) 			  	3,351,070     			-      			- 

Shareholders retirement 
of common stock 	          									2,272     			-      			- 

The accompanying notes are an integral part of the
consolidated financial statements.


Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

OP-TECH Environmental Services, Inc., a Delaware
corporation and Subsidiaries (the "Company"), provides
comprehensive environmental services predominately in Upstate
and Central New York.  The Company performs industrial cleaning
of non-hazardous materials, provides varying services relating
to plant facility closure including demolition and asbestos
services, provides remediation services for sites contaminated
by hazardous materials and provides emergency spill response
services.  The Company has two subsidiaries, St. Lawrence
Industrial Services, Inc., a New York corporation and OP-TECH
Environmental Services, Ltd., a Canadian subsidiary.

Principles of Consolidation

The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned
subsidiaries.  All significant intercompany accounts and
transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements.  Estimates also affect the reported amounts of
revenues and expenses during the reporting period.  Actual
results could differ from those estimates.

One of the more significant estimates includes the
evaluation of impairment of the Company's long-lived assets.  As
more fully described in Note 5, the Company has had certain
property held for sale appraised by an independent third party. 
Such appraisals are dependent upon various assumptions and
estimates, which are subject to change over time.  Future
changes in these estimates may have a material effect on the
conclusions reached and the determination of impairment.

Cash Equivalents

The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be
cash equivalents.  The carrying amount reported in the balance
sheet for cash and cash equivalents approximates its fair value.

Notes to Consolidated Financial Statements


December 31, 1997, 1996 and 1995

1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Project Income Recognition and Unbilled Project Costs

Predominately, contracts are short-term in nature,
less than three months, and revenue is recognized as the costs
are incurred and billed.  Income on long-term contracts is
recognized on project billings based on the
percentage-of-completion method utilizing the cost-to-cost
basis.  Project costs are generally billed in the month they are
incurred and are shown as current assets.  

In the event the interim billings exceed costs and
estimated profit, the net amount of deferred revenue is shown as
a current liability.  Estimated losses are recorded in full when
identified.

Concentration of Business Risk - Significant Customers

Sales to one customer, other than an affiliated
party, amounted to $463,000, $428,989 and $1,777,468 in 1997,
1996 and 1995, respectively.  Accounts receivable at December
31, 1997, 1996 and 1995 include $102,510, $164,439 and $157,027,
respectively, from this customer.

For the year ended December 31, 1997 two individual
customers, including one shareholder, generated approximately
$1,970,000, or 28% of the Company's revenues.

Property and Equipment

Property and equipment are stated at cost. 
Expenditures for repairs and maintenance are charged to expense
as incurred.  Depreciation and amortization of assets including
those recorded under capital leases is provided for using the
straight-line method.

Assets Held for Sale

Assets held for sale are stated at the lower of
carrying amount or fair value, determined by an independent
appraisal, less cost to sell.

Long and Short-Term Debt

The carrying amounts of the Company's short-term
secured and unsecured borrowing and non-traded variable-rate
long-term debt agreements approximate fair value.  The fair
values of the Company's non-traded fixed-rate long-term debt are
estimated using discounted cash flow analysis, based upon the
Company's current incremental borrowing rates for similar types
of borrowing arrangements.

 

Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995

 



1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Income Taxes

The Company provides for income taxes in accordance
with the liability method as set forth in Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes". 
Under the liability method, deferred tax assets and liabilities
are determined based on the difference between the financial
statement and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that may be in
effect in the years in which the differences are expected to
reverse.

Impairment of Long-Lived Assets

In March 1995, the Financial Accounting Standards
Board ("FASB") issued Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets to Be
Disposed Of ("FAS 121"), for fiscal years beginning after
December 15, 1995.  This statement requires long-lived assets
and certain identifiable intangibles, to be held and used by the
Company and assets to be disposed of by the Company, to be
reviewed for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not
be recoverable.  As a result the Company's assets classified as
assets held for sale and assets to be held and used have been
evaluated in accordance with the provisions of SFAS 121.

Earnings Per Share

The Company adopted SFAS No. 128, "Earnings Per
Share", as of December 31, 1997.  Under the new standard, basic
and diluted earnings per share are presented for each period in
which a statement of operations is presented.  Basic earnings
per share is computed by dividing income less preferred stock
dividends by the weighted average shares actually outstanding
for the period.  Diluted earnings per share includes the
potentially dilutive effect of shares issuable under the
employee stock purchase and incentive stock option plans.  Due
to the losses incurred by the Company, the impact of the
outstanding options and warrants are anti-dilutive and therefore
their impact has not been included in the dilutive earnings per
share disclosure.

Reclassification

Certain amounts in the 1996 financial statements have
been reclassified to conform to 1997 presentation.

Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995


2.CAPITAL RESTRUCTURING AND BUSINESS OPERATIONS

The Company entered into letter of agreements with
its two largest creditors, OnBank & Trust Co. ("OnBank") and
O'Brien & Gere Limited ("OBG Limited"), a shareholder, on
October 14, 1997, which were executed as of December 31, 1997,
whereas OnBank and OBG Limited agreed to convert all or part of
their indebtedness, including accrued interest, into Common
Stock of the Company, and to forgive the remaining balance.  OBG
Limited, to which the Company was indebted for $1,540,000,
including accrued interest of $140,000, forgave $1,000,000 of
the debt and converted the balance into 1,080,000 shares of the
Company's Common Stock.  OnBank, to which the Company was
indebted for $2,811,070, including accrued interest of $75,332,
converted their debt and accrued interest for 5,622,000 shares
of the Company's Common Stock.  The price per share, of $.50,
was negotiated with the two creditors and the Company based on
the price of recent sales and their estimates of future risk.

As a result of these transactions the Company has
positive shareholders' equity, and has been able to obtain bank
financing from another financial institution for working capital.

This restructuring has had a significant impact not
only on the Company's financial position, but also on its
operations and cash flows.  Interest cost will be reduced from
the $300,000 - $400,000 per year level based on the new
capitalization of the Company.

The Company is focusing on growing its operations
throughout the Northeastern United States and Pennsylvania, two
areas not pursued by the Company in the past.  Secondly, a new
sales force has been put in place to aggressively market its
core business areas as well as expansion areas.  Third, the
Company is continuing its focus on its core service lines with
industrial and governmental customers which is expected to lead
to an increase in recurring work.

In order to achieve its 1998 budgeted revenue and
profit goals, the Company believes it can develop core service
revenues throughout the Northeastern United States and
Pennsylvania.  The Company has relocated two of its senior
employees to the Eastern New York and Massachusetts regions to
build a client base that will provide recurring core service
revenue.  With respect to its sales force, the Company has hired
several sales representatives throughout the New England and
Pennsylvania areas to pursue both private industrial and
governmental opportunities.

Based on its 1998 budget, the Company will have
adequate cash flow to meet its obligations as they come due. 
Through the first two months of 1998 the Company was profitable.
However, there can be no assurance that the Company will be
able to continue to meet its budgets and maintain adequate cash
flows.<PAGE>
<Page Heading>Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995

 

3.RELATED PARTY TRANSACTIONS

The Company purchases technical, accounting, and
consulting services and rented certain office and warehouse
space from a shareholder and its affiliates.  The cost for these
services amounted to $97,225, $150,743 and $122,924 in 1997,
1996 and 1995, respectively.  

Additionally, the Company provided $1,507,364,
$1,109,963 and $1,637,499 of remediation, sub-contract support
and project services to a shareholder and its affiliates for the
years ending December 31, 1997, 1996 and 1995, respectively.

Interest expense on an unsecured line of credit with
a stockholder was approximately $94,000, $59,500 and $16,000 in
1997, 1996, and 1995, respectively.

 

4.PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the
following at December 31:

         	 	 	 	 	 	 	 	 	 	 1997 	 	 	 1996 	 

Furniture and fixtures 	 	 $35,033 	   $35,033 
Office machines	 	 	 	 	 	 	44,399     133,920 
Utility vehicles	 	 	 	 	 	101,140     184,941 
Field equipment 	 	 	 	 	1,244,601   1,909,347 
Aqueous treatment 
system    	 	 	 	 	 	 	 	 	100,002  	 	332,909 
    	 	 	 	 	 	 	 	 	 	 	1,525,175	 	2,596,150 
Less: Accumulated 
depreciation              	902,196	 	1,361,201 

     	 	 	 	 	 	 	 	 	 	  $622,979 	$1,234,949 



Depreciation expense approximated $282,000, $448,000
and $472,000 for 1997, 1996, and 1995, respectively.

 

5.IMPAIRMENT OF LONG-LIVED ASSETS

Assets Held for Sale

As a result of the Company's operating losses, and
the need to increase cash flows, the Company decided, in the
third quarter of 1996, to actively pursue the disposal of under
utilized assets.  The largest assets to be disposed are those
associated with the Massena Port Facility ("Facility").  The
Company acquired this asset in 1991 for the purpose of
developing a large aqueous treatment facility.  Although the
Company has vigorously attempted to sell the Facility or find
alternative uses, it has been unable to do so in the last twelve
months.  As a result, based upon management's evaluation of the
Facility's fair value, the Company has recognized an impairment 

Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995

5.IMPAIRMENT OF LONG-LIVED ASSETS (Continued)

Assets Held for Sale (Continued)

loss of approximately $308,000 in the fourth quarter
of 1997.  Management's estimation of fair value is based upon an
evaluation of existing facts and circumstances, including
current real estate market conditions; the 1997 independent
appraisal; a discount related to an estimated period of time to
consummate the sale of the Facility; and certain other factors,
less costs of disposal.

The components of Assets Held for Sale consist of the
following:
Massena Port Facility, 
net of write down							 			 	$ 	1,595,000 
Equipment       	 	 	 	 	 	 	 			 		80,000 
       	 	 	 	 	 	 	 	 	 			 	$ 	1,675,000 



Assets to be Held and Used

Due to the on-going operating losses, the Company has
continuously evaluated whether there has been an impairment of
its long-lived assets in accordance with the provisions of SFAS
#121.  As a result of this review, the Company recognized an
impairment loss, based upon estimated undiscounted cash flows
and a specific detailed review of fixed assets, of approximately
$489,000 of its long-lived assets during the third quarter of
1997.  No further write downs were deemed to be necessary by
management at this time.  Management will continue to monitor
whether, as a result of future events, any further impairment of
its assets has occurred.

 

6.	DEBT AND LEASE OBLIGATIONS

At April 6, 1998, the Company has an annually
renewable borrowing agreement that provides borrowings up to
$1,000,000 on a revolving loan basis, collateralized by all
accounts receivable, inventory and equipment now owned or
acquired later.  Advances are based upon 75% of certain accounts
receivable, as defined in the loan document.  The revolving loan
is subject to renewal, at the bank's option and is payable on
demand, or if no demand is made outstanding advances are due on
February 16, 1999, and are guaranteed by a shareholder for an
amount not-to-exceed $500,000.  Under the terms of the
guarantee, should the Bank be unable to recover the full amount
of outstanding balances from the Company's collateralized
assets, the shareholder agrees to purchase the Massena Port
Facility for the unrecovered balance up to a maximum of
$500,000.  A wholly-owned subsidiary of the same shareholder
currently has an option to purchase the Massena Port Facility
for $2,000,000.

Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995

 

6.DEBT AND LEASE OBLIGATIONS (Continued)

Borrowings against the revolving loan aggregated
$500,000 at December 31, 1997.  Interest is charged at prime
plus 1.5%, or 10% at December 31, 1997.  The weighted average
borrowing rates under short-term credit facilities was 10% and
10.25% at December 31, 1997 and 1996, respectively.

Long-term debt is summarized as follows at December
31, 1997:

Various equipment installment
obligations, due in aggregate monthly installment payments of
$8,992, including interest rates between 8.37% and 15%,
collateralized by equipment with a carrying value 													
of $260,134. 
								                          $228,855 
Less: Current portion													(107,911) 
                   													  $120,944 


Interest paid amounted to approximately $235,000,
$326,000 and $357,000 in 1997, 1996 and 1995, respectively.

Scheduled principal payments on long-term debt,
assuming the creditors do not call the debt, for the next five
years are as follows:

         	 	 	 	 	 	 	 	1998  	 	$107,911 	 	 	 
           	 	 	 	 	 	 	1999  	 	 	82,026 	 	 	 
         	 	 	 	 	 	 	 	2000  	 	 	38,918 	 	 	 

              	 	 	 	 	 	 	 	 	  $228,855 	 	 	 



Office facilities, a portion of which is with an
affiliate of the Company's shareholder, are leased under
noncancelable operating leases expiring at various dates through
1999.  Rent expense incurred amounted to $89,000, $120,314 and
$98,720 in 1997, 1996 and 1995, respectively.  Future minimum
lease payments under noncancelable operating leases are as
follows: 1998 - $50,572, 1999 - $7,818.

The Company incurred non-cash debt and capital lease
obligations of $47,500 and $16,104 in 1997 and 1996,
respectively, for the acquisition of equipment.

 

7.SHAREHOLDERS' EQUITY

The Company approved a stock option plan permitting
the issuance of up to 500,000 shares of common stock.  The
purpose of the Plan, which is more fully defined by the Plan
document, provides various directors, officers and employees
("Eligible Employees") of the Company the opportunity to acquire
a stake in the growth of the Company, as well as a means of
promoting the Eligible Employee's maximum effort and continued
association with the Company.

Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995

7.SHAREHOLDERS' EQUITY (Continued)

Stock options granted under the Plan allow the
Eligible Employee to purchase the Company's common stock, for a
period not to exceed three years, at the price established at
the grant date.  Options granted under the Plan must specify
option periods ending not more than ten years from the date of
grant.  The following table summarizes option activity of the
Plan during 1997, 1996 and 1995:	

                                										Weighted 			No. of 
									                                 	Average 			Shares 
									                                	Exercise 			Under 
                                 											Price 			Options 

														

Balance at December 31, 1994      									$2.50 			250,000 

			Options granted                       				- 	     		- 

Balance at December 31, 1995     									  2.50 			250,000 

			Options granted                  							  -      			- 

			Options forfeited                								 -      			- 

Balance at December 31, 1996      									 2.50 			250,000 

			Options granted                 								 1.50  			50,000 

			Options expired                								 (2.50)		(250,000) 

Balance at December 31, 1997       									 1.50 			50,000 


The Company has elected to follow APB Opinion No. 25
and related interpretations in accounting for the options
granted under the Plan.  Under APB Opinion No. 25, because the
exercise price of the Company's stock is above the market price
of the underlying stock on the date of the grant, no
compensation expense is recognized.  Under SFAS No. 123, rights
to acquire company stock are to be valued under the fair value
method and the proforma effect of such value on reported
earnings and earnings per share are to be disclosed in the notes
to the financial statements.  As the fair value of these options
are not material, further disclosures are not required.

On March 2, 1994, the Company issued to Summit
Capital Associates, Inc. two separate warrant certificates to
purchase 146,250 and 125,000 shares, respectively, of common
stock at a price of $1.65 per share.  These warrants expired on
March 1, 1998.

As of December 31, 1997, the Company has reserved a
total of 321,250 shares of common stock for issuance under the
agreements discussed above.  No options or warrants have been
exercised.

During 1997 certain directors returned 500 shares of
common stock to the Company for no consideration.  Said shares
were then retired by the Company.

Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995

8.INCOME TAXES

The Company has net operating loss carryforwards of
approximately $5,425,000 for income tax purposes that expire
through the year ending December 31, 2012.  State income taxes
and franchise taxes paid were $366 in 1997 and 1996.

Deferred income taxes reflect the net tax effect of
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for income tax purposes.  For financial reporting purposes,
the Company increased their valuation allowance by $118,408 and
$541,505 in 1997 and 1996, respectively, due to the uncertainty
of realizing the deferred tax assets in future years.   The
Company has recorded a valuation allowance, amounting to the
entire net deferred tax asset, due to the historical losses
incurred by the Company.

Significant components of  the Company's deferred tax
liabilities and assets as of December 31, 1997 and 1996 are as
follows:

            	 	 	 	 	 	 	 	 	 	 1997 	 	 	 1996 	 

Deferred tax liabilities: 	 	 	 	 	 	 	 	 	 	 	 	 	 
Tax over book depreciation 	  $60,218	   $154,626 
Deferred tax assets: 	 	 	 	 	 	 	 	 	 		 	 	

Net operating 
loss carryforward 		   		 	$1,844,768	 $1,817,757 
Accounts receivable 
reserve 	 	 	       	 	 	 	 	 	24,602 	 	 	11,259 
Other 	 	          	 	 	 	 	 	 	6,289 	 	 	22,643 
Total deferred tax assets  	1,875,659	 	1,851,659 

Valuation allowance 
for deferred assets   	 	 	(1,815,441)	(1,697,033) 

Deferred tax assets	 	 	 	 	  $60,218 	 	$154,626 

Net deferred taxes 	       						$ 	0      		$ 	0 


9.EMPLOYEE BENEFIT PLAN

During 1992 the Board of Directors approved an
employee retirement plan which covers substantially all
employees.  The Plan is funded by voluntary employee
contributions which are matched by the Company at a designated
percentage, and additional contributions by the Company at the
discretion of the Board of Directors.  There were matching
contributions to the plan of $9,137, $12,083 and $10,108 in
1997, 1996 and 1995, respectively, by the Company.  The Company
did not make any discretionary contributions to the Plan in
1997, 1996 and 1995.

 

Notes to Consolidated Financial Statements

December 31, 1997, 1996 and 1995

 

10.COMMITMENT AND CONTINGENCIES

The Company is subject to various federal, state and
local regulations relating to environmental matters, including
laws which require the investigation and, in some cases,
remediation of environmental contamination.  The Company's
policy is to accrue and charge to operations environmental
investigation and remediation expenses when it is probable that
a liability has been incurred and an amount is reasonably
estimable.

              MEMORANDUN OF AGREEMENT AND EXCHANGE


THIS MEMORANDUN OF AGREEMENT AND EXCHANGE (hereinafter referred
to as the
"Memorandum")  made by and among ONBANK & TRUSR co., 101 South
Salina Street, Syracuse, New York 13202 (hereinafter referred to
as the "Bank") and OP-TECH ENVIRONMENTAL SERVICES, INC., 6392
Deere Road, Syracuse, New York 13206 (hereinafter referred to as
"OP-TECH")  and O'BRIEN & GERE LIMITED, 5000 Brittonfield
Parkway, East Syracuse, New York 13057 (hereinafter referred to
as "O'Brien & Gere")  on the date set forth below.

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

         WHEREAS, the Bank holds claims against Op-Tech in the
total amount of 2,811,070.69 million dollars secured by various
security interests and mortgage liens upon property of Op-Tech,
all of which claims and liens, etc. are evidenced by various loan
documents ("hereinafter referred to as the "Loan Documents") ;
and WHEREAS, O'Brien & Gere holds claims against Op-Tech in the
total amount of 1.54 million dollars (including all accrued
interest) which claims are evidenced by various notes and other
documents (hereinafter referred to as "O'Brien & Gere
Indebtedness");  and WHEREAS, Op-Tech has requested that the Bank
and O'Brien & Gere cooperate in the restructuring of the
obligations of Op-Tech; and WHEREAS, O'Brien & Gere is willing to
accommodate the request of Op-Tech by forgiving one million
dollars of the O'Brien & Gere Indebtedness and exchanging .54
million dollars of the O'Brien & Gere Indebtedness in
consideration of the issuance by Op-Tech of its common stock; and
WHEREAS, the Bank is willing to accommodate the request of Op-
Tech by exchanging all of its claims against Op-Tech and the
collateral security therefor in the consideration of the issuance
by Op-Tech of its common stock.  WHEREAS, the Bank is willing to
accommodate the request of Op-Tech by exchanging all of its
claims against Op-Tech and the collateral security therefor in
the consideration of the issuance by Op-Tech of its common stock.
NOW, THEREFOR, the Bank and Op-Tech and O'Brien & Gere do hereby
agree, represent and covenant as follows:  Simultaneously with
the execution hereof Op-Tech has duly issued, tendered and
delivered to the Bank a certificate (hereinafter referred to as
the "Bank Certificate") demonstrating the ownership by the Bank
of 5,622,140 million shares of the common stock of Op-Tech.
Simultaneously with the execution hereof, the Bank has tendered
and delivered to Op-Tech by assignment all of the original Loan
Documents in consideration of the delivery to the Bank of the
aforesaid Bank certificate by     Op-Tech.  Simultaneously with
the execution hereof, Op-Tech has duly issued, tendered and
delivered to O'Brien & Gere a certificate (hereinafter referred
to as the "O'Brien & Gere Certificate")  demonstrating the
ownership by O'Brien & Gere of 1.08 million shares of the common
stock of Op-Tech.  Simultaneously with the execution hereof,
O'Brien & Gere has cancelled the O'Brien & Gere Indebtedness and
exchanged part of the O'Brien & Gere Indebtedness in
consideration of the delivery to O'Brien & Gere of the aforesaid
O'Brien & Gere Certificate by Op-Tech.  The transactions
described herein were executed pursuant and subject to and in
reliance upon and in consideration of the terms, provisions and
conditions of the Letter Agreement executed by and among the
Bank, Op-Tech and O'Brien & Gere dated as of October 13, 1997,
and the voting Agreement executed between the Bank and O'Brien &
Gere on or about even date herewith , and the Assignment executed
and delivered by the Bank to Op-Tech on or about even date
herewith, and the cancellation and exchange of the O'Brien & Gere
Indebtedness executed and delivered by O'Brien & Gere to Op-Tech
on or about even date herewith, and the letter issued by Op-Tech
to the Bank on or about even date herewith, and the letter issued
by Op-Tech to O'Brien & Gere on or about even date herewith, and
this Memorandum (cumulatively referred to as the "Exchange
Documents"), all of which terms, provisions and conditions shall






survive the execution of this Memorandum and the exchange of the
aforesaid Bank Certificate and Loan Documents, and aforesaid
O'Brien & Gere Certificate and cancellation and exchange of the
O'Brien & Gere Indebtedness, and shall continue in full force and
effect thereafter.  Op-Tech shall pay all of the costs and
expenses to be accrued or incurred for the Bank's filing of Forms
3 and 13 (g) with the Securities and Exchange Commission.  The
transactions described herein, this Memorandum, and the other
Exchange Documents shall not in any way affect, amend, modify,
terminate or discharge any agreement, contract or instrument
heretofore executed and delivered by O'Brien & Gere to the Bank,
or any obligation or liability of O'Brien & Gere to the Bank
arising therefrom, all of which shall remain in full force and
effect.


Date:   March___,  1998



OP-TECH ENVIRONMENTAL                  O'BRIEN & GERE LIMITED
       SERVICES, INC.


By:  ______________________                      By:
_____________________
          John R. Loveland,
Cornelius B. Murphy Jr.
          Chief Executive Officer                       President


ONBANK & TRUST CO.


By:  ______________________
                                             Title



                  
                    


                    VOTING AGREEMENT

     AGREEMENT dated as of March 25, 1998, between ONBANK & TRUST
CO., ("OnBANK")  with a mailing address at PO Box 4983, Syracuse,
New York 13221-4983 and O'Brien & Gere Limited ("OBG") with an
office at 5000 Brittonfield Parkway, East Syracuse, NY  13057.

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

    WHEREAS, OnBank will become a shareholder of OP-TECH
Environmental Services, Inc.("OP-TECH") through an exchange of
debt for common stock and OBG is presently a shareholder of OP-
TECH, and WHEREAS, OnBank and OBG own approximately 49% and 27%
of the outstanding common stock of OP-TECH, and WHEREAS, the
parties to this agreement are desirous of establishing certain
rights and relationship between themselves, NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the
parties hereto covenant and agree as follows:
1.   For a term of five (5) years from the date hereof (the
  "Term"), OBG covenants and agrees that so long as it shall
  continue to own voting shares of OP-TECH, it will vote all such
  shares in any election of directors in such manner as to elect up
  to two(2) nominees of OnBank to the Board of Directors.  In the
  event the OP-TECH board of directors shall consist of five (5)
  members, it shall support the nomination of one (1) nominee to
  the board; in the event of a larger board, it will support the
  nomination of two(2) nominees to the board.
2.   Notwithstanding anything herein to the contrary, OnBank &
  Trust Co. shall not at any time be required or obligated to
  nominate any persons for election to the Board of Directors of Op-
  Tech.
3.   OnBank has advised OBG that it is their intention to
  liquidate its common stock position in OP-TECH during the period
  of the Term.  While OBG has not determined its policy regarding
  its disposition of OP-TECH common stock, should it elect to sell
  share, it will not do so at a faster rate than OnBank disposes of
  shares.  The parties recognize that they will periodically confer
  to carry out the intent of the paragraph.
4.   This agreement shall be binding upon and inure to the
  benefit of the parties hereto and any person or transferee to
  whom common stock of OP-TECH is transferred ("Transferee") (other
  than a Transferee who purchases such stock in the public market)
  and the respective heirs, executors, administrators, successors
  and assigns of the parties (or Transferee) hereto.
5.   All matters relating to this Agreement shall be governed and
  construed by an under the laws of the State of New York.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.

ONBANK & TRUST CO.

BY:__________________
      Name:
      Title:

O'Brien & Gere Limited

By: _________________
      Name:
        Title:
BECKMAN, MILLMAN & SANDERS, LLP
                           ATTORNEYS AT LAW
116  JOHN STREET, NEW YORK,  N.Y.  10038
                                        
                                                      TELEPHONE
                                        (212) 406-4700
                                                      TELECOPIER
                                        (212) 406-3750
                                        
                                
                         HUNGARY OFFICE
                          VACI UTCA 18
                                         1052
                        BUDAPEST, HUNGARY
                                   
                                   TELEPHONE: (361)266-5987


                                   March 25, 1998
                                
                                

OnBank & Trust Co.
101 South Warren Street
Syracuse, New York  13202

Melvin & Melvin, LLP
217 South Salina Street
Suite 700
Syracuse, New York  13202


     Re:  Exchange ("Exchange") of indebtedness owed by Op-Tech
             Environmental Services, Inc.  ("Op-Tech") to OnBank
&
             Trust Co.  ("Bank") in the aggregate amount of
             $2,735,738.27 principal and $75,332.42 interest
accrued
             through December 1, 1997 ("Debt") in consideration
of
             issuance to the Bank of 5.6 million shares ("Stock")
of
             the common stock of Op-Tech evidenced by a
certificate (s)
            ("Certificate") thereof

Gentlemen:

We have acted as counsel to Op-Tech in connection with the
Exchange. Said Exchange will be executed pursuant to the Letter
Agreement ("Letter Agreement") executed among the Bank, Op-Tech
and O'Brien & Gere, Limited ("OBG") dated as of October 13, 1997;
Memorandum of Agreement and Exchange ("Memorandum")  executed
among the Bank, Op-Tech and OBG on or about even date herewith;
Voting Agreement executed among the Bank and OBG on or about even
date herewith; Letter ("Op-Tech Letter") issued by Bank to Op-
Tech (all of which including the Certificate are referred to
cumulatively as the "Exchange Documents").

In connection with this opinion, we have reviewed the proceedings
of Op-Tech in relation to the Exchange and the Exchange
Documents, and such other documents, representations, statements
and certificate of public officials, Op-Tech, and others as we
have deemed relevant or proper as a basis for our opinion set
forth herein.  In addition, we have assumed the genuineness of
signatures on original documents and the conformity to the
original of all copies.





BECKMAN, MILLMAN & SANDERS, LLP

     Based on the foregoing and such other investigations as we
deem proper and advisable we are of the opinion that:

Op-Tech is a duly organized, validly existing corporation, and is
in good standing under the laws of the State of Delaware, has the
power to own its assets and to transact the business in which it
is presently engaged.
Op-Tech has an authorized capitalization consisting of twenty
million (20,000,000) shares of common stock $.01 par value, of
which as of December 31, 1997, 11,555,123 shares were outstanding
and 231,250 shares were issuable pursuant to the options
outstanding.
The execution and delivery by Op-Tech of the Exchange Documents
and the performance by Op-Tech thereunder as provided for therein
(a) have been duly authorized by all necessary action, (b) do not
contravene any law or governmental regulation or, to the best of
our knowledge, any contractual restriction binding on or
affecting them or any of their properties, and (c) the execution,
delivery and perfection thereof are within the capacity and power
of each of the persons who have executed the Exchange Documents
on behalf of Op-Tech.
No consent or approval of any person, and no consent, license
approval, authorization, or declaration of any governmental
authority, bureau, or agency of the United States of America or
the States of New York or Delaware, or to the best of our
knowledge, of any other jurisdiction is or will by required in
connection with the execution, delivery or performance by Op-Tech
of the Exchange Documents.
The execution and delivery of the Exchange Documents and the
performance by Op-Tech thereunder, are in compliance with and
will not violate any New York or Delaware or federal law
((including, without limitation, the Securities Act of 1933, as
amended ("Act"), the Securities Exchange Act of 1934, or New York
General Business law Article 23-A)), rule or regulation of
general applicability, or any judgement, order, decree, writ or
injunction known to us to be binding on or applicable to Op-Tech
and will not contravene the Certificate of Incorporation or by-
laws of Op-Tech.
The Exchange Documents have been duly executed and delivered by
Op-Tech and, assuming the due execution and delivery where
appropriate, by the Bank.  Each of such Exchange Documents
constitutes the valid and legally binding obligation of each of
the parties who have executed it, and it is enforceable in
accordance with its terms.
Upon the issuance and delivery to it of the Certificate, the Bank
will be the absolute owner, free and clear of the rights or
interest of any party of 5.6 million shares of the common stock
of Op-Tech.  The stock will be fully paid for, non-assessable and
validly issued pursuant to the exemption provided by Section 4(2)
and/or 4(6) of the Act. None of the other shareholders of Op-Tech
have or will have any pre-emptive rights with respect to either
the Certificate or the Stock or any shares of Op-Tech issued
hereafter.  At the time of its issuance, the Stock will not be
registered and the Certificate will bear a Rule 144 legend.
Other than an obligation to file Forms 3 and 13(d) under the
Securities Exchange Act of 1934, no other obligations or duties
accrue to the Bank by virtue of its acquisition and/or ownership
of the stock and/or execution and performance of the Exchange
Documents.

It is acknowledged that the company's information statement
noticed a special meeting of stockholders to be held December 26,
1997 at the offices of the company.  We are advised that no
stockholders appeared at the meeting.  We are further advised
that on December 27, 1997, OBG and Richard L. Elander, holders of
a majority of the common stock of the company, executed a consent
of shareholders approving an amendment to the company's
certificate of incorporation.  We are of the opinion that
stockholders approval of the above mentioned amendment was duly
authorized.









The above mentioned information statement recited in part that
the company had no obligation to file a registration statement
providing for a sale of company shares owned by bank and OBG.  We
are advised

by the company that at the time the information statement was
distributed, it believed they were under no obligation to file a
registration statement.  We are of the opinion that because it
subsequently became necessary for the company to agree to file a
registration statement for the sale of shares owned by Bank to
complete a debt for stock exchange, such action did not render
the information statement defective.

The Above opinions are provided solely for your benefit in
connection with the transactions described above and may not be
used or relied upon, or published or communicated to, any other
person, without our prior written consent.

Accompanying this letter is a certificate of malpractice
insurance in the amount of $2,000,000 addressed to the Bank for
the Bank's reliance concerning this letter and the Exchange.



                                   Very truly yours,
                                        
                                   Beckman, Millman & Sanders,
                                   LLP


                                   By: _________________________
                                                  Steven A.
Sanders, a partner
                                                  of the firm




  Sworn to before me
  This 25th day of March, 1998



   _______________________
   notary public




















           MACKENZIE SMITH LEWIS MICHELL & HUGHES, LLP
                           LAW OFFICES
                                
                                
OnBank & Trust Co.
101 South Warren Street
Syracuse, New York  13202

Melvin & Melvin, LLP
217 South Salina Street
Suite 700
Syracuse, New York  13202

RE:   Restructure of Debt of OP-TECH Environmental Services, Inc.
("OP-TECH") including the Exchange ("Exchange") for common stock
of OP-TECH of the indebtedness owed by OP-TECH to OnBank & Trust
Co.  ("Bank") and the forgiveness and exchange ("Replacement")
for common stock of OP-TECH of the indebtedness owed by OP-TECH
to O'Brien & Gere Limited ("OBG")

Gentlemen:
We have acted as counsel to OBG in connection with the exchange
and the replacement. Said exchange and replacement will be
executed pursuant to the letter agreement ("Letter Agreement")
executed among the Bank, OP-TECH and OBG dated as of October 13,
1997 ; Memorandum of Agreement and Exchange ("Memorandum")
executed among the Bank, OP-TECH and OBG on or about even date
herewith; Voting Agreement executed among the bank, and OBG on or
about even date herewith; Letter ("OP-TECH Letter") issued by OP-
TECH to the Bank and OBG on or about even date herewith; and
assignment issued by the bank to OP-TECH (all of which are
referred to cumulatively herein as the "Exchange and Replacement
Documents").
In connection with this opinion, we have reviewed the proceedings
of OBG in relation to the Exchange and Replacement Documents, and
such other documents, representations, statements and
certificates of public officials, OBG, and others as we have
deemed relevant or proper as a basis for our opinion set forth
herein.  In addition, we have assumed the genuineness of
signatures on original documents and the conformity to the
original of all copies submitted to us as photocopies or
conformed copies.
Based on the foregoing and such other investigations as we deem
proper and advisable we are of the opinion that:
1.   OGB is a duly organized, validly existing corporation, and
  is in good standing under the laws of the State of New York, has
  the power to own its assets and to transact the business in which
  it is presently engaged.
2.   The execution and delivery by OBG of the Exchange and
  Replacement Documents and the performance by OBG thereunder as
  provided for therein (a) have been duly authorized by all
  necessary action, (b) do not contravene any law or governmental
  regulation or, to the best of our knowledge, any contractual
  restriction binding on or affecting them or any of their
  properties, and (c) the execution, delivery and perfection
  thereof are within the capacity and power of each of the persons
  who have executed the exchange and replacement documents on
  behalf of OBG.
3.   No consent or approval of any person, and no consent,
  license, approval, authorization, or declaration of any
  governmental authority, bureau, agency of the United States of
  America or the State of New York, or to the best of our
  knowledge, of any other jurisdiction is or will be required in
  connection with the execution, delivery or performance by OBG of
  the exchange and replacement documents.
4.   The execution and delivery of the exchange and replacement
  documents and the performance by Obg thereunder, are in
  compliance with and will not violate any New York or federal law,
  rule or regulation of general applicability, or any judgement,
  order, decree, writ, injunction or agreement known to us to be
  binding on or applicable to OBG and will not contravene the
  certificate of incorporation or by-laws of OBG.
5.   The exchange and replacement documents to which OBG is a
  party have been duly executed and delivered by OGB.  Each of such
  exchange and replacement documents which was executed by OBG
  constitutes the valid and legally binding obligation of OBG, and
  it is enforceable in accordance with its terms, except as such
  may be limited by applicable federal or state law relating to
  bankruptcy, reorganization or insolvency, or other law generally
  affecting the enforcement of creditors' rights and remedies.
The above opinions are provided solely for your benefit in
connection with the transactions described above and may not be
used or relied upon, or published or communicated to, any other
person, except the bank's counsel, Melvin & Melvin, LLP, without
our prior written consent.

Very truly yours,
MACKENZIE SMITH LEWIS MICHELL & HUGHES, LLP






              OP-TECH ENVIRONMENTAL SERVICES, INC.
                         6392 DEERE ROAD
                    SYRACUSE, NEW YORK  13206

                         March 25, 1998



OnBank & Trust Co.


Gentlemen:
OnBank & Trust Co. ("OnBank") has become the owner of
approximately 49% of our common stock.  These shares have been
issued to you pursuant to exemptions under the securities act of
1933, as amended (the "Act").  The certificate (s) evidencing
ownership of the shares bear a rule 144 restrictive legend.
We acknowledge that OnBank has accepted the legended  certificate
(s) with the specific understanding and agreement that our
company will use its best efforts to provide for registration of
the shares during the early part of the year 2001 but no later
than April 30, 2001.
You are aware that the registration statement will be subject to
review by the securities and exchange commission. Upon the
registration statement being  declared effective the legended
certificates referred to above will be exchanged for unlegended
stock certificates.
All expenses, other than underwriting discounts and commissions,
if any, incurred in connection with the registration filing
and/or qualification, including without limitation, all
registration, listing, filing and qualification fees, printers
and accounting fees, shall be borne by the company.

Cordially,

OP-TECH Environmental Svcs., Inc.





Gentlemen:
O'Brien & Gere Limited ("OBG") has become the owner of
approximately 27% of our common stock.  These shares have been
issued to you pursuant to exemptions under the Securities Act of
1933, as amended (the "Act"). The certificate (s) evidencing
ownership of the shares bear a rule 144 restrictive legend.
We acknowledge that OBG has accepted the legended certificate (s)
with the specific understanding and agreement that our company
will use its best efforts to provide for registration  of the
shares during the early part of the year 2001 but no later than
April 30, 2001.
You are aware that the registration statement will be subject to
review by the securities and exchange commission.  Upon the
registration statement being declared effective the legended
certificates referred to above will be exchanged for unlegended
stock certificates.
All expenses, other than underwriting discounts and commissions,
if any, incurred in connection with the registration filing
and/or qualification, including without limitation, all
registration, listing, filing and qualification fees, printers
and accounting fees, shall be borne by the company.

Cordially,
OP-TECH Environmental Svcs., Inc.