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 

For the fiscal year ended December 31, 1996

OR

[]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
    SECURITIES EXCHANGE ACT OF 1934
  

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 incorporation 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 
	     non-affiliates of the Company as of March 15, 1997 was 
	     $1,820,436 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, 1997.  
	     Common Stock, $.01 par value.  4,854,497 

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 and Central New 
	     York.  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).  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 non-hazardous 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 subcontracts hydrogeological services to 
	     petroleum companies, engineering firms and local and 
	     state public entities.  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 a year round 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 designated state 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.  The requirements 
	     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 having 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 and an additional office in 
	     Canada.  While operations in the Syracuse and Massena offices 
	     are substantial, the Rochester and Albany 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 1996, 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 1996, sales to one customer, 
	     other than an affiliated party,amounted to approximately 
	     $428,000.  Sales to two individual customers totalled 
	     approximately $1,539,000 or 27% 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 $1.0 million respectively.  In addition, the
	     Company also maintains workers compensation, comprehensive 
	     automobile, and Directors and Officers liability insurance.

Backlog

	     As of December 31, 1996, the Company had a backlog of orders 
	     it believed to be firm of approximately $1,400,000.


Employees

	     As of March 15, 1997, the Company had a total of 60 full-time 
	     employees between its headquarters in Syracuse, NY and its 
	     branch offices in Massena, Rochester and Albany, NY.  All
	     employees of St. Lawrence Industrial Services, Inc., 
	     a wholly owned subsidiary, are covered by union contracts.  
	     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 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, occupy 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.

	     Additionally, the Company leases approximately 6,400 square feet 
	     of office and garage space in Rochester, New York from Elam Sand 
	     and Gravel at a current monthly rate of $1,500 plus electrical
	     and gas charges.  The terms of the lease extend through August 
	     31, 1997 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, ship and boiler room building; and two storage sheds.

	     The Company is currently pursuing the sale of its Massena 
	     property and is currently in negotiations with two independent 
	     parties interested in purchasing it.  (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.  Currently, the Company is unable to determine the 
	     extent of the contamination if any. 
	     Management plans to begin digging test sites on the property 
	     in the second quarter of 1997 at which time it will be in a 
	     better position to determine the extent of any ground 
	     contamination if any.

	     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.  
	     The Company also, from time to time, leases equipment to outside 
	     parties.

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

	     None

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, 1995                                   1 1/4                1/2
June 30, 1995                                      3/4                5/8  
September 30, 1995                               1                    3/4   
December 31, 1995                                1                    3/4
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 15, 1997                                     5/8                1/8     

	     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, 1997, there were approximately 140 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

	    1996          1995       1994        1993       1992

Revenues  $5,792,548  $7,145,587  $5,143,623  $4,648,574  $2,041,532
Net Loss  (1,553,320)   (847,037) (1,131,139)   (587,804)   (953,790)
Net Loss    
Per Share   ($.32)       ($.17)     ($.25)       ($.20)     ($.32)



Balance Sheet Data       1996      1995        1994       1993        1992  
				  (5)                (2),(3) & (4) (2)&(3)

Total Assets          $5,155,409  $5,527,547  $6,269,756  $5,610,187  $5,202,398
Long-Term Obligations   $875,000   2,326,459  $1,681,686  $3,249,620  $3,182,871


(2)          On March 2, 1994, a shareholder of the Company converted its 
	     $1.0 million long-term obligation
	     to common stock.

(3)          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.

(4)          April 6, 1994, the Company sold 170,000 shares of Common Stock 
	     for $255,000.

(5)          On November 1, 1995, the Company converted a $500,000 short-term 
	     note to a long-term obligation.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
	RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

	     At December 31, 1996, the Company had cash and cash equivalents 
	     of $19,077 as compared to $32,044 at December 31, 1995.

	     At December 31, 1996, the Company had a working capital deficit 
	     of $2,978,958 compared to a working capital deficit of $742,556 
	     at December 31, 1995, with a current ratio of .4 to 1 at the end
	     of 1996 compared to .7 to 1 at the end of 1995.  The increase 
	     in the working capital deficit is primarily attributable to the 
	     default provisions in the Company's debt which has been 
	     classified as current as discussed below.

	     As a result of recurring operating losses during 1996, the 
	     Company's cash provided by financing activities was due 
	     primarily to proceeds from its line of credit with O'Brien & 
	     Gere Limited, an affiliate of the Company.

	     For the year ended December 31, 1996, the Company's net cash 
	     used in operating activities was $371,140 versus net cash 
	     provided by operating activities of $308,694 in 1995. 

	     During 1996, the Company had capital purchases of $153,953 
	     which were financed through operations and long term debt.  
	     Capital expenditures consisted of several utility vehicles 
	     and a Vec Loader which increased the Company's ability to 
	     provide dry vacuum services.

	     On May 31, 1996, the Company renewed  its $1,000,000 working 
	     capital line of credit with a bank.  The line of credit 
	     currently expires on May 31, 1997.  The Company expects to 
	     satisfy its liquidity requirements in 1997, which are 
	     expected to consist of working capital requirements, 
	     principal and interest payments on debt and some small 
	     capital expenditures.  In order for the Company to achieve
	     these cash requirements, it will be necessary for the bank to 
	     renew the line of credit in May 1997. 
	     Although there can be no guarantees of its renewal, management 
	     believes that the bank will renew this credit facility.

	     Due to the significant amount of debt held by the Company, 
	     a significant rise in interest rates could have an adverse 
	     effect on the Company's profitability and its ability to meet 
	     cash flow requirements.

	     On August 1, 1996, the Company entered into a modification 
	     with the bank that deferred principal payments on the first 
	     and second mortgages until February 1998.  In addition, 
	     interest payments on its unsecured line of credit with O'Brien 
	     & Gere Limited have been deferred until February of 1998.  
	     The Company's ability to resume principal and interest payments 
	     on these obligations depends on its ability to meet its 
	     budgetary goals in 1997.

	     During 1996, the Company increased its existing unsecured line 
	     of credit with O'Brien & Gere Limited, an affiliate of the 
	     Company and a shareholder, to $1,000,000 due on March 1, 1998.  
	     As of December 31, 1996, there was an $875,000 advance against 
	     the line of credit.  Subsequent to year end, the Company borrowed 
	     an additional $125,000 bringing the shareholder note up to 
	     $1,000,000.  In March of 1997, O'Brien & Gere Limited approved 
	     an additional $400,000 advance, $200,000 which is immediately 
	     available to the Company and an additional $200,000 which will 
	     become available in May 1997 subject to meeting certain 
	     budgetary goals.

	     Substantially all of the Company's debt is with one financial 
	     institution, and such agreements have cross default provisions.  
	     As a result of non compliance with covenants on certain of the 
	     debt, all of the debt is deemed to be in default and callable 
	     by the Bank.  Though the Bank has not at this date called the 
	     obligations, there can be no assurances that they will not 
	     exercise this right in the future.

NEW PRESIDENT

	     During 1996, the Board of Directors conducted a national 
	     search for a new President.  After reviewing numerous candidates, 
	     the Board decided to hire Anthony R. Pongonis as the Company's new
	     President.  Since taking on this role in October of 1996, Mr. 
	     Pongonis has been focused on achieving a higher sales volume 
	     for the Company while assembling a new management team to lead 
	     the Company into 1997.  

IMPAIRMENT OF LONG-LIVED ASSETS TO BE DISPOSED OF.

	     The Company's financial statements reflect the non-cash impact 
	     of Statement of Financial Accounting Standards (SFAS) #121 which 
	     was adopted in 1996.  The non-cash charge as a result of the
	     adoption of SFAS #121 was $342,896.  $240,594 was related to 
	     equipment which was deemed non-usable in the third quarter and 
	     $102,302 related to the write down of an intangible non-current 
	     asset. 
	     As a result of the reduced carrying amount of these long-lived 
	     assets, depreciation and amortization expense is expected to 
	     be reduced by approximately $90,000 in 1997.

ASSETS HELD FOR SALE

	     Assets held for sale of $1,908,677 at December 31, 1996 
	     consist principally of the Massena Port Facility valued 
	     at $1,828,677 and certain equipment valued at $80,000.

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.  
	     Currently, the Company uses the property for its Massena 
	     branch office headquarters, equipment storage and its Aqueous 
	     Treatment/360 Facility.  Due to the significance of the 
	     carrying value of the property, the Company obtained an 
	     independent third party appraisal to support its carrying value.  
	     As a result of the appraisal, management has concluded based 
	     on several factors that there is no impairment of the property's 
	     value at this time.

	     Management recognizes the potential debt reduction and generation 
	     of working capital if the property were to be sold.  As a result, 
	     management is actively pursuing the sale of the property and 
	     realizes its value as both a petroleum storage facility as well 
	     as a non-petroleum products storage facility.  Currently, 
	     management is pursuing options with two independent parties who 
	     are interested in the property for each of the above purposes.

EQUIPMENT

	     Management is actively pursuing the sale of certain equipment 
	     valued at $80,000.  Due to the nature of the equipment and the 
	     current demand for it, an impairment valuation is not deemed
	     appropriate at this time.

1997 BUSINESS PLAN

	     Management has formulated a business plan which it believes will 
	     help the Company achieve both its revenue goal and overhead 
	     reduction plan for 1997.  There are no assurances that this
	     program will be successful.  Some of the specifics of the plan 
	     are outlined as follows:

Revenues

	     To increase sales volume, the Company has implmented a Master 
	     Service Agreement Plan.  This plan will allow the Company to 
	     become listed on the preferred vendor lists of large industrial
	     customers.  The successful marketing of these plans will allow 
	     for recurring industrial services to these clients and provide 
	     a base workload for the Company.

	     In addition to the above, the Company is pursuing public 
	     projects in 1997.  In the past, OP-TECH has never aggressively 
	     pursued work in the public sector.  As a result of changing 
	     markets, management believes the Company can be very competitive 
	     in the public sector and still yield a gross margin sufficent 
	     enough to meet budgetary goals.

Gross Margin

	     In addition to achieving a higher sales volume for 1997, 
	     management is focusing on attaining a gross margin sufficient 
	     enough to cover overhead expenses.  As the overall environmental 
	     market has become very competitive, managing the type of work 
	     pursued has become a difficult challenge. 
	     Management believes it can achieve a proper mix of business 
	     during 1997 to enable it to achieve a gross margin consistent 
	     with its goals.

Overhead Reduction

	     Management has taken and will continue to take the necessary 
	     steps it deems appropriate to reduce corporate overhead.  
	     Some actions taken by the Company during 1996 and early 1997 
	     are outlined as follows;

	     All staffing needs were reviewed and under utilized staff 
	     were released thus reducing overhead wages.


	     The Company eliminated its in house drilling division as it 
	     found the demand for these services to be at an all time low 
	     in its service area.

	     Several pieces of unused equipment were sold during 1997 
	     which helped generate approximately $40,000 in additional 
	     operating cash.  In addition, the Company has since paid down
	     $82,000 of debt related to this equipment.

	     Overhead items such as shop supplies, shop labor and non-project 
	     expenses have been held to a minimum in 1997.

	     Although there can be no assurances of the Company's ability 
	     to meet its cash requirementsduring 1997, management believes 
	     achieving certain revenue, gross margin and overhead reduction
	     goals set forth in its 1997 operating budget will allow the 
	     Company to meet the necessary cash requirements to enable it 
	     to continue as a going concern.

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 form cost reduction programs; sell 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 form 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. 

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) compared to $847,347 ($.17 per share) in 1995.  
	     As a result of the Company's net operating loss, there was no
	     provision for federal income taxes recorded in 1996.

1995 COMPARED TO 1994

Revenues

	     During the year ended December 31, 1995, the Company's 
	     revenues increased by 38.9% to $7,145,587 compared to 
	     $5,143,623 reported for the previous year ended December 31, 
	     1994.  A comparison of revenues by business type between the 
	     current and prior year shows the following.  The asbestos 
	     abatement and demolition business increased due to a large 
	     contract with an affiliated party.  The hydrogeological and 
	     drilling business increased due to a high volume of governmental
	     contracts during 1995.  Finally, the Company's emergency spill 
	     response revenue rose significantly due to several large fuel 
	     truck spills which occurred throughout the year.  The Company 
	     also saw a moderate increase in the transportation and disposal 
	     business while the industrial cleaning business only experienced 
	     a slight increase.


Project Costs and Gross Profit

	     Project Costs for the year ended December 31, 1995 increased 
	     32.5% to $4,509,328 from $3,402,744 for the year ended December 
	     31, 1994.  The increase in project costs is attributable 
	     primarily to increased revenues.  The gross profit margin for 
	     the year ended December 31, 1995 was 36.8% versus 33.8% for the 
	     year ended December 31, 1994.  The increase in the gross margin 
	     is attributable to a greater number of projects which were 
	     labor and equipment intensive during 1995.

Selling, General and Administrative Expenses

	     During the year ended December 31, 1995, selling, general and 
	     administrative (S,G & A) expenses increased by 20.5% to 
	     $3,118,967 compared to $2,589,287 reported for the previous 
	     year ended December 31, 1994.  The increase in SG & A is mainly 
	     attributable to an increase in bad debt write offs, depreciation 
	     expense and added personnel.  In addition, the Company wrote 
	     off the remaining value of its customer list and organization 
	     costs in the amount of $107,000.  SG & A as a percent of revenue
	     decreased to 43.6% in 1995 versus 50.4% for 1994.

Operating Loss

	     For the year ended December 31, 1995, the Company's operating 
	     loss improved by 43.1% to $482,708 compared to a loss of 
	     $848,408 for the year ended December 31, 1994.  The improvement 
	     in the operating loss is attributable to increased revenues and 
	     a higher gross profit margin in 1995.

Interest Expense

	     Interest expense increased 23.1% in 1995 to $357,460 from 
	     $290,453 in 1994 as a result of increased borrowings by the 
	     Company principally to finance capital purchases.

Net Loss
	     The net loss for the year ended December 31, 1995 improved to 
	     $847,037 ($.17 per share) from $1,131,139 ($.25 per share) 
	     in 1994.  As a result of the Company's net operating loss, 
	     there was no provision for federal income taxes recorded in 
	     1995.

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 May 30, 1996 for a term of one year.


Name, Age                   Year First
Principal Occupation         Elected     Certain Other Information

Terry L. Brown (45)
Vice President                 1991      Mr. Brown has served his 
					 present position as Vice President 
					 since November 1991.  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 (55)
Vice President                  1991      Mr. Elander has served his 
					  present position as Vice 
					  President and General Manager 
					  since June 1994.  He also 
					  served as Chief Executive Officer 
					  from November 1991 to June 1994.  
					  Mr. Elander serves as a Director 
					  of O'Brien & Gere Limited since 
					  August 1991.  From prior to 1988, 
					  Mr. Elander served as President 
					  of O'Brien & Gere Operations.

John R. Loveland (59)
Chairman of the Board and
Chief Executive Officer          1994     Mr. Loveland has served 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. (51)
President                         1991    Mr. Murphy has served his current 
					  position since June 1994.  He 
					  previously served as the Company's 
					  Chairman of the Board from November 
					  of 1991 to June 1994.  Mr. Murphy 
					  is a Director of O'Brien & Gere 
					  Limited since 1985 and President 
					  of O'Brien & Gere Engineers, Inc. 
					  since 1992.  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.

Steven A. Sanders (51)
Director                          1991     Mr. Sanders is President of 
					   the Law Office of Steven A. 
					   Sanders P.C. since 1992.  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                 59        Chairman of the Board and C.E.O
Cornelius B. Burphy, Jr.         51        President
Anthony R. Pongonis              44        President
Terry L. Brown                   45        Vice President
Richard L. Elander               55        Vice President and General Manager
Dennis S. Lerner                 50        Secretary
Joseph M. McNulty                42        Treasurer

	     Mr. Pongonis was hired during the fourth quarter of 1996.  
	     He has over twenty-five years of experience in the 
	     environmental services market.

	     Richard L. Elander, Cornelius B. Murphy, Jr. and Terry L. Brown 
	     resigned as officers of the Company on December 31, 1996.  
	     Each of them continues to remain directors of the Company.

	     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 is the 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 Compensation           Awards  Payments  

Name and                      Other Annual     #      LTIP    All Other
Principal   Year     Salary   Compensation  Options  Payouts  Compensation(1) 
Position    
	    
					
					
John R.     1996   $ 16,800     -0-        50,000    -0-       -0-
Loveland    1995   $ 24,960     -0-        50,000    -0-       -0-
Chairman &  1994   $ 12,480     -0-         -0-      -0-       -0-
C.E.O


Richard L.                                                 
Elander     1996   $100,564      -0-       100,000   -0-     $6,946
Vice        1995   $105,957      -0-       100,000   -0-     $5,575
President   1994   $123,325      -0-         -0-     -0-     $4,508           

(1)          Amounts shown consist of the Company's contribution under 
	     the Company's 401(k) Profit Sharing Plan.

Year End Option Table

The following table sets forth certain information regarding stock options 
held as of December 31, 1996 by the named executive officers.  
			      
						Number of Securities
		  Shares                        Underlying Unexercised
		  Acquired on   Value           Options at Fiscal Year End
Name              Exercise #    Realized        Exercisable  Unexercisable

John R. Loveland                                     50,000       -0-
Richard L. Elander                                  100,000       -0-




					  Value of Unexercised
					  In - the Money Options
					  Options at Fisacl Year End (1)
					  Exercisable     Unexercisable

John R. Loveland                             -0-              -0-
Richard L. Elander                           -0-              -0-


(2)          The options for all Executive Officers were out-of-the 
	    -money on December 31, 1996 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.  During 1996, the Company paid its 1995 
	     Directors fees in the following manner, two directors were 
	     issued 757 shares of stock and $864 in cash, one director was
	     paid in 757 shares of stock and two directors were paid nothing.  
	     The fair value of the stock on the issue date was $.62 per 
	     share.  At December 31, 1996 the Company has accrued the 
	     remaining portion of 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, 1997 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, 1997, 
	     4,854,497 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  

O'Brien & Gere Limited
5000 Brittonfield Parkway        2,068,200   (2)          42.6%
Syracuse, NY 13220

Richard L. Elander
3613 Melvin Drive South            428,608   (3)(7)       8.9%
Baldwinsville, NY 13027

Terry L. Brown                      50,000   (4)(7)       < 1%

Cornelius B. Murphy Jr.                667   (7)          < 1%

Steven A. Sanders                   25,552   (5)(7)       < 1%

John R. Loveland                    96,000   (6)(7)        1.0%



All Officers & Directors
as a Group (7 persons)            (4)(5)(6)(8)

(1)          Except as set forth in (2) below, the beneficial owners 
	     have sole voting and investment power over the shares owned.

(2)          1,397,059 of these shares are pledged as collateral to 
	     OnBank & Trust Company, Syracuse, New York to secure the 
	     Corporation's Commercial Mortgage Loan in the principal 
	     amount of $1,150,000.  For so long as these shares are 
	     pledged to OnBank & Trust Company and the Corporation is 
	     not in default int the payment of principal and interest on 
	     the Commercial Mortgage Loan.  O'Brien & Gere Limited 
	     ("Limited") shall have the right to continue to vote the
	     pledged shares on all matters.  The pledge will terminate 
	     on December 31, 1996 or on any subsequent fiscal year, 
	     provided certain revenue, income, and balance sheet ratios 
	     are achieved, and there are no material adverse factors in 
	     the financial condition of the Corporation as reasonably 
	     determined by OnBank & Trust Company.

(3)          Includes currently exercisable options to purchase 100,000 
	     shares.  Does not include 2,068,200 shares owned by Limited 
	     of which Mr. Elander is a director.

(4)          Includes 50,000 shares issuable upon exercise of currently 
	     exercisable stock options.  Does not include 2,068,200 
	     shares owned by Limited of which Mr. Brown is a director.

(5)          Does not include 200 shares which are owned by Mr. Sanders' 
	     wife as custodian for the son as to which Mr. Sanders 
	     disclaims beneficial ownership.

(6)          Includes 50,000 shares issuable upon exercise of currently 
	     exercisable options.  Does not include 2,068,200 shares 
	     currently owned by Limited of which Mr. Loveland is a 
	     director.  Includes 46,000 shares owned by Mr. Loveland's 
	     wife as to which Mr. Loveland disclaims beneficial ownership.

(7)          Director

(8)          Includes 50,000 shares issuable upon exercise of 
	     currently exercisable options in the name of
	     the following executive officers: Joseph McNulty, Treasurer 
	     and Dennis Lerner, Secretary.

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 1996 amounted to
	     $88,992.

	     During 1996, the Company provided approximately $1,110,000 
	     of remediation, sub-contract support and project services 
	     to affiliated parties.

	     The Company purchases technical, accounting and consulting 
	     services from affiliated parties.  The costs for these 
	     services amounted to $150,743 in 1996.

	     The Company had a $1,000,000 unsecured line of credit with 
	     Limited due on March 1, 1998. 
	     Interest is payable at prime plus 2%.  Interest expense 
	     amounted to $59,453 for 1996.

	     Steven A. Sanders, a director of the Company, is President 
	     of The Law Offices of Steven A. Sanders, P.C. which has 
	     provided professional services to the Company since August 
	     of 1991, 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
									 
(a)  Financial Statements and Exhibits                               Page 

1)  Report of Independent Auditors.                                  F-1
     Consolidated Balance Sheets at December 31, 1996 and 1995.      F-2
     Consolidated Statements of Operations for the years 
     ended December 31, 1996, 1995 and 1994.                         F-3
     Consolidated Statements of Shareholders' Deficit for the years 
     ended December 31, 1996, 1995 and 1994.                         F-4
     Consolidated Statements of Cash Flows for the years        
     ended December 31, 1996, 1995 and 1994.                         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, 1996.

(c)          Exhibits - None


	     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 4, 1997

	     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 4th day of April, 1997.



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


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



/s/ Terry L. Brown                                         
Terry L. Brown                Vice President and Director



/s/ Richard L. Elander                                     
Richard L. Elander            Vice President and Director

									   


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



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

Independent Auditors' Report



Shareholders and Board of Directors

OP-TECH Environmental Services, Inc. and Subsidiaries


We have audited the accompayning consolidated balance sheets of OP-TECH 
Environmental Services, Inc. and Subsidiaries as of December 31, 1996 
and 1995, and the related consolidated statements of operations, 
shareholders' deficit, and cash flows for the years then ended.  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 resonable 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 statementst referred to 
above present fairly, in all material respects, the consolidated
financial position of OP-TECH Environmental Services, Inc. and
Subsidiaries at December 31, 1996 and 1995, and the consolidated 
results of their operations and their cash flows for the years ended
December 31, 1996 and 1995, 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 and has a net capital 
deficiency 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 statemetns do not include any 
adjustments that might result from the outcome of this uncertainity.

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
April 2, 1997

						    
Coopers & Lybrand

Independent Auditors Report

Shareholders and Board of Directors
OP-TECH Environmental Services Inc.
  and Subsidiaries

We have audited the consolidated statements of operations, shareholders'
equity and cash flows of OP-TECH Environmental Services, Inc. and 
subsidiaries for the year ended December 31, 1994.  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 audit.

We conducted our audit 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 managment as well as 
evaluating the overall financial statement presentation.  We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements of OP-TECH 
Environmental Services, Inc. and subsidiaries referred to above 
present fairly, in all material respects, the consolidated results of
their operations and their cash flows for the year ended December 31, 
1994, in conformity with generally accepted accounting principles.


Ernst & Young LLP


OP-TECH Environmental Services, Inc. and Subsidiaries

Consolidated Balance Sheets
December 31, 1996 and 1995

		ASSETS                            1996            1995

Current Assets:
  Cash and cash equivalents                   $   19,077     $  32,044
  Accounts receivable (net of allowance for
  doubtful accounts of approximately $33,000
  in 1996 and $31,000 in 1995):
      Unaffiliated parties                       890,028     1,064,689
      Affiliated parties                         658,690       196,270
					       1,548,718     1,260,959

  Costs on uncompleted projects applicable to 
  future billings                                100,941       102,199
  Prepaid expenses                               117,082       114,535
  Other assets                                   151,418        57,308
      Total current assets                    $5,155,409    $5,546,944

	 LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
  Notes payable to bank                        $  971,000   $   780,000
  Accounts payable:
    Unaffiliated parties                          954,066       681,161
    Affiliated parties                            112,997        10,242
					       $1,067,063       691,403
  Billings in excess of costs and estimated profit
    on uncompleted contracts                      238,063       149,202
  Accrued payroll and related liabilities         208,385       125,281
  Accrued expenses and other liabilities          233,562       147,632
  Current portion of lon-term debt              2,198,121       416,083
    Total current liabilities                   4,916,194     2,309,601

Long-term debt                                      0         2,081,459  
Long-term notes payable - affiliate               875,000       245,000
    Total liabilities                             875,000     4,636,060

Shareholders' deficit:
  Common stock, par value $.01 per share; authorized
    7,500,000 shares; 4,854,497 and 4,850,058 and shares
    outstanding as of December 31, 1996 and 1995, 
    respectively                                   48,535        48,500
  Additional paid-in capital                    4,491,773     4,485,157
  Accumulated deficit                          (5,176,093)  (3,622,773)
						 (635,785)      910,884 

						$5,155,409   $5,546,944

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








OP-TECH Environmental Services, Inc. and Subsidiaries
Consolidated Statements of Operations
Years Ended December 31, 1995 and 1994



				 1996             1995             1994

Project billings and services  $5,792,548       $7,145,587       $5,143,623  
Project Costs                   4,036,846        4,756,576        3,554,744

    Gross margin                1,755,702        2,389,011        1,588,879

Selling, general and 
  administrative expenses       2,593,996        2,871,719        2,437,287 
Prvision for impairment of
  long-lived asset                342,896                                     

    Operating loss            (1,181,190)        (482,708)        (848,408)

Other income and expense:
  Interest income                                                     8,699
  Interest expense              (357,173)        (357,460)         (290,453)
  Other income (expense), net    (14,957)          (3,503)            2,923

				(372,130)        (360,963)        (278,831)

    Loss before income taxes  (1,553,320)        (843,671)      (1,127,239)

State income taxes                                   3,366            3,900

    NET LOSS                 $(1,553,320)     $ (847,037)      $(1,131,139

    Net loss per share          $(.32)          $(.17)            $(.25)

OP-TECH Environmental Services, Inc. and Subsidiaries

Consolidated Statements of Shareholders' Deficit
Years Ended December 31, 1994, 1995 and 1996


					   Additional
				 Common     Paid-In     Accumulated     Total
				  Stock     Capital       Deficit

Balances at December 31, 1993    $30,050  $1,979,721  $(1,644,597)  $ 365,174
Conversion of debenture note of
 affiliate to 671,141 shares       6,711     993,289       -         1,000,000  
Issuance of 1,170,000 shares      11,700   1,507,674       -         1,519,374 
Net loss                             -         -       (1,131,139)  (1,131,139) 

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)

<PAGE>
OP-TECH Environmental Services, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 1996, 1995 and 1994

				  1996             1995             1994
Operating activities:
  Net loss                   $(1,553,320)     $ (847,037)      $(1,131,139)
  Adjustments to reconcile net
   cash (used in) provided by
   operating activities:
    Provision for loss on 
     accounts receivable          131,290         126,334            61,906
    Depreciation and 
     amortization                 486,021         728,438           526,182
    Provision for impariment
     of long-lived assets         342,896      
    Loss on disposal of equipment                  3,770             4,600
    (Increase) decrease in operating
     assets and increase (decrease)
     in operating liabilities:
       Accounts receivable      (419,049)         338,765          (829,025)
       Costs on uncompleted projects
	applicable to future 
	billings                   1,258           (1,141)           57,740
       Prepaid expenses and other
	assets                     6,209           (2,743)          (97,812)
       Billings and estimated profit
	in excess of costs of
	uncompleted contracts     88,861          (18,221)          167,423
       Accounts payable and other
	accrued expenses         544,694          (19,471)           96,540
  Net cash (used in) provided by 
   operating activities        (371,140)           308,694        (1,143,585)

Investing activities:
  Purchases of property and
   equipment                   (153,953)         (503,640)          (492,521)
  Proceeds from sale of
   property and equipment                           5,707
  Increase inorganization 
   costs/other                                                       (3,583)
  Maturity of certificates 
   of deposit                                                        255,000
     Net cash used in investing
      activities                (153,953)         (497,933)         (241,104)
			  
Financing activities:
  Proceeds from notes payable
   to banks and long-term
   borrowings, net of 
   financing costs             1,732,000           231,621         1,387,288
  Proceeds from notes payable
   to affiliates                 630,000           140,000           250,000
  Principal payments on
   long-term borrowings to
   affiliates                                                      (145,000)
  Principal payments on
   subordinated debt due
   to related party                                               (875,0000)
  Principal payments on
   current and long-term
   borrowings                (1,856,525)         (310,998)         (609,917)
  Prceeds form issuance of
   common stock                   6,651             4,512         1,519,374
      Net cash provided by
       financing activities     512,126            65,135         1,526,745

  (Decrease) increase in
   cash and cash equivalents   (12,967)         (124,104)          142,056

Cash and cash equivalents at 
  beginning of year             32,044           156,148            14,092

    CASH AND CASH EQUIVALENTS
     AT END OF YEAR         $   19,077      $     32,044        $  156,148


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


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.

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 $428,989, $1,777,468 and $570,720 in 1996, 1995 and 1994,
respectively.  Accounts receivable at December 31, 1996, 1995
and 1994 include $164,439, $157,027 and $232,716, respectively,
from this customer.

For the year ended December 31, 1996 two individual customers,
including one shareholder, generated approximately $1,538,952,
or 27% 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 cost or
estimated net realizable value.  The net realizable value of
assets held for sale, which comprise principally the Massena
property, is substantially determined by an independent
appraisal.

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.


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.

Net Loss Per Share

Net loss per share is based on the average number of common and
common equivalent shares outstanding during the period.  The
weighted average number of shares outstanding is 4,851,614 in
1996, 4,848,834 in 1995 and 4,455,364 in 1994, therefore, both
primary and fully diluted earnings per share were calculated
using the same number of weighted average common shares
outstanding.

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.

Reclassification

Certain amounts in the 1995 financial statements have been
reclassified to conform to 1996 presentation.



2.              BUSINESS OPERATIONS

As reflected in the accompanying financial statements, the
Company has suffered recurring losses from operations since
inception, has a working capital deficiency at December 31,
1996, and a negative capital deficiency that raise substantial
doubt about its ability to continue as a going concern.

Substantially all of the Company's debt is with one financial
institution, and such agreements have cross default provisions. 
As a result of non compliance with covenants on certain of the
debt, all of the debt is deemed to be in default and callable by
the Bank.  Though the Bank has not at this date called the
obligations, there can be no assurances they will not exercise
their right in the future.  In addition, the Company's
$1,000,000 revolving loan is subject to annual renewal in May
1997.  Accordingly, all debt related to this Bank has been
classified as current.

Management's plans with respect to its ability to continue as a
going concern cover the following significant areas.  First of
all, there has been a change in the leadership at the Company
intended to refocus the Company on growth and profitability. 
Secondly, the new leadership has put together a budget for 1997
that, if achieved, will provide sufficient cash flow to meet its
obligations when they come due, when considered in connection
with the financing plans discussed below.  This budget includes
three main points of focus: increasing revenues, maintaining its
gross profit margin, and continued reduction in operating
expenses.

In order to achieve its budgeted revenue goals, the Company is
focusing on developing relationships with large industrial
customers to ensure the Company is on their preferred vendor
lists.  The Company believes this will allow for more recurring
core service revenue from this base of companies.  In addition,
the Company is aggressively pursuing public projects, a market
segment not pursued in the past.

With respect to gross margin, the Company has eliminated certain
product lines not able to generate sufficient margins to warrant
continued management focus.  All efforts are now being focused
on those projects whereby the Company is able to be both
competitive and be able to realize historical margin levels.

The Company has been engaged in continuous efforts to reduce its
fixed operating expenses.  The 1997 budget includes goals to
reduce fixed costs by a further ten percent.  The Company is
also looking at under utilized assets that could be sold to
raise additional funds.

With respect to its financing agreement, the Company has entered
into a modification agreement with the Bank deferring principal
payments on the first and second mortgages until February 1998. 
This amendment has reduced the Company's cash flow requirements
for 1997.  If the Bank, and other creditors, do not call their
debt, as a result of the covenant defaults, then the principal
payments due for 1997 on all debt obligations will be $217,583.

Subsequent to year end, the Company borrowed an additional
$125,000 from its largest Shareholder, bringing the Shareholder
note up to $1,000,000.  In addition, the Shareholder has
committed to advance an additional $200,000 in convertible
debentures today, and another $200,000 in convertible debentures
after May 1, 1997, contingent upon the occurrence of certain
events.<PAGE>
Notes to Consolidated Financial Statements

Based on achieving the Company's 1997 budget, availability of
additional financing from a Shareholder, renewal, under similar
terms, of the Company's revolving loan and anticipating the Bank
will not call its debt obligations, management believes that
there will be sufficient cash flow to meet its obligations when
they come due.  However, there can be no assurances the Company
will be able to increase its revenues, maintain its gross margin
and achieve its cost reductions to achieve its 1997 budget, nor
that the Bank will renew its revolving loan and not call its
debt obligations during 1997.  In the event any one or
combination of the above events do not occur, the Company may
not be able to meet its obligations as they come due.



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 $150,743, $122,924 and $162,012 in 1996, 1995 and
1994, respectively.  

Additionally, the Company provided $1,109,963, $1,637,499 and
$1,059,362 of remediation, sub-contract support and project
services to a shareholder and its affiliates for the years
ending December 31, 1996, 1995 and 1994, respectively.

Interest expense on an unsecured line of credit with a
stockholder was approximately $59,500, $16,000 and $26,500 in
1996, 1995, and 1994, respectively.

In connection with the bank financing arrangement, a certain
shareholder has pledged to the bank, an aggregate of 1,397,059
shares of common stock of the Company owned by them, as security
for the Company's commercial mortgage and term loan.

See also Note 6 for additional related party transactions.


4.              PROPERTY, PLANT AND EQUIPMENT

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

			 1996                    1995    

														 

Land and improvements   $     -        $       1,117,761 

Building                      -                  833,833 

Furniture and fixtures    35,033                  34,334 

Office machines          133,920                 120,567 

Utility vehicles         184,941                 164,600 

Field equipment        1,909,347               2,586,632 

Aqueous treatment        332,909                 329,176 
System
		       2,596,150               5,186,903 

Less: Accumulated      1,361,201               1,421,886 
Depreciation
		   $   1,234,949            $  3,765,017 



Depreciation expense amounted to $447,988, $471,811, and
$381,972 for 1996, 1995, and 1994, 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,
to actively pursue the disposal of under utilized assets.  The
largest assets to be disposed of is the Massena Port Facility. 
The Company acquired this asset in 1991 for the purpose of
developing a large aqueous treatment facility.  Based on an
independent appraisal, the Company has determined there is not
an impairment of the recorded value of this asset.  In addition,
the Company has identified certain non-critical equipment
expected to be sold in 1997.  This equipment was deemed to have
an impairment of approximately $240,000 and, accordingly in the
third quarter, the Company provided for such through a charge to
the income statement.

The components of Assets Held for Sale consist of the following:

Massena Port Facility   $ 1,828,677 

Equipment                    80,000 

			  $       1,908,677 



Assets to be Held and Used

Due to the operating losses over the past years, the Company has
evaluated whether there is any impairment of its long-lived
assets in accordance with SFAS #121.  As a result of this
review, the Company wrote off approximately $100,000 of
intangible assets during the fourth quarter related to the
original purchase of Fourth Coast Pollution, Inc.  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 impairment of its assets has occurred.



6.              DEBT AND LEASE OBLIGATIONS

At December 31, 1996, the Company had a borrowing agreement that
provides for available borrowings up to $1,000,000 on a
revolving loan basis due in May of 1997, subject to certain
acceleration clauses.  The revolving loan is subject to renewal,
at the bank's option, in May of 1997.  Advances are based upon
85% of certain accounts receivable, as defined in the loan
document, plus 50% of the open project costs.  Borrowings
against the revolving loan aggregated $971,000 at December 31,
1996.  Interest is charged at prime plus 2% (10.25%).  The
Company also has an outstanding $29,000 letter of credit with a
bank at December 31, 1996.  The weighted average borrowing rates
under short-term credit facilities were 10.25% at December 31,
1996 and 10.5% at December 31, 1995.

Long-term debt is summarized as follows at December 31, 1996 and
1995:                                                                      

						  1996          1995    

Commercial mortgage note payable to a bank, 
due in monthly installments of $13,232 
commencing February 1998 and continuing
through July 2007, including interest 
at 9.5% through June 1997 and an interest 
rate equal to the prime plus 350 basis points
determined 45 days prior to the beginning of   
the next two five year periods, collateralized 
by land and building held for sale
having a net carrying value of $1,828,677. (a)                         
						  $ 985,782     $ 1,013,386 

$1,000,000 unsecured line of credit payable to 
a Shareholder with interest and principal 
due March 1, 1998.  Interest is
accrued at prime plus 2% (10.25% at 1996). (c)      875,000         245,000  
						    

Term notes payable to a bank, due in 
monthly principal installments of $14,546 
plus interest through January 2000.  As
of February 2000 monthly interest payments 
of $7,208 plus interest through May 2000.  
Interest is at prime plus 2% (10.25% at 1996) 
and loan is collateralized by equipment with 
a net carrying value of $428,435.  (a)(b)           385,275         506,455 

Term note payable to a bank, due in monthly 
principal installments  of $2,438 plus 
interest through December 1999, with interest 
at prime plus 2%, collateralized by equipment with
a net carrying value of $102,866. (a)                89,417         115,999 

Term note payable to a bank, due in 
monthly principal installments of $5,952 
plus interest commencing February 1998
and continu- ing through November 2002 
with a balloon payment of $107,144 
due December 2002.  Interest is at 
prime plus 2% (10.25% at 1996) and 
loan is collateralized by a second 
mortgage on land and building held 
for sale having a net carrying value of                                     
$1,828,677.  (a)( b)                                452,381         500,000 

Various equipment installment obligations, 
due in aggregate monthly installment 
payments of $11,100, including interest
rates between 8.37% and 15%, collateralized 
by equipment with a carrying value                                         
of $321,607. (a)                                    285,266         361,702 

											  3,073,121       2,742,542 

	Less: Current portion                     2,198,121         416,083 

									      $     875,000   $   2,326,459 

(a)     As a result of various subjective acceleration clause and
cross defaults in the debt agreements, all of the debt
obligations, other than the Shareholder line of credit, are
callable by the lenders.  As of the date of these financial
statements, none of the lenders have called such debt.

(b)     As of August 1, 1996, the Company entered into a
modification agreement with the Bank to defer principal payments
until February 1, 1998.  The Company is making interest payments
as prescribed by the original loan agreements.

(c)     Subsequent to December 31, 1996, the Company authorized the
issuance of $200,000 of unsecured convertible debt to be sold to
the Shareholder.  The conversion will be at the price of $1 of
debt per share of Company common stock.  Other terms of the debt
are currently being negotiated.  The Shareholder has
conditionally indicated its willingness to acquire an additional
$200,000 (for a maximum total of $400,000) of this convertible
debt, to be issued no earlier than May 1, 1997.

The carrying amounts and fair values of the Company's debt
obligations at December 31, 1996 are as follows:


Short-term debt obligations     $       1,846,000     $ 1,846,000 
Long-term debt obligations:                                                
Variable-rate obligations                 927,073         927,073
Fixed-rate obligations                  1,271,048       1,255,593 



Interest paid amounted to approximately $326,000, $357,000 and
$325,000 in 1996, 1995 and 1994, respectively.











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

1997              $       217,583                          
1998                    1,285,423                        
1999                      333,805                          
2000                      223,191                          
2001                      161,108                          
Thereafter                852,011                          

			3,073,121                        



Subsequent to December 31, 1996 the Company sold approximately
$80,000 of equipment, the proceeds were utilized to reduce its
outstanding debt obligations.

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 $120,314, $98,720 and $71,352 in
1996, 1995 and 1994, respectively.  Future minimum lease
payments under noncancelable operating leases are as follows:
1997 - $137,228, 1998 - $70,036, 1999 - $22,416.

The Company incurred non-cash debt and capital lease obligations
of $16,104 and $84,782 in 1996 and 1995, respectively, for the
acquisition of equipment.



7.              STOCK OPTIONS AND WARRANTS

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.  

Stock options granted under the Plan, at prices ranging from
$1.50 to $2.75 per share, 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
1996, 1995 and 1994:

					  Weighted        No. of 
					  Average         Shares 
					  Exercise        Under 
					  Price           Options 

														

	Balance at January 1, 1994         $2.75          175,000 

		   Options granted          2.43          275,000 

		   Options expired         (2.75)        (175,000) 

	Balance at December 31, 1994        2.43          275,000 

		   Options granted           -               - 

	Balance at December 31, 1995        2.43          275,000 

		   Options granted          1.50           25,000 

		   Options forfeited       (2.75)         (68,750) 

	Balance at December 31, 1996        2.59          231,250 




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. 
These warrants were issued in connection with a certain advisory
service agreement in 1993.  These warrants are exercisable on or
after March 2, 1995 and on or before March 1, 1998 for a price
of $1.65 per share.

As of December 31, 1996, the Company has reserved a total of
502,500 shares of common stock for issuance under the agreements
discussed above.  No options or warrants have been exercised.



8.              INCOME TAXES

The Company has net operating loss carryforwards of
approximately $5,346,000 for income tax purposes that expire
through the year ending December 31, 2011.  State income taxes
and franchise taxes paid were $366 in 1996 and 1995.

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 $541,505 and
$321,667 in 1996 and 1995, 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, 1996 and 1995 are as
follows:
					    1996        1995    

	Deferred tax liabilities:                                                 

	Tax over book depreciation       $ 154,626    $ 212,075 

														 

	Deferred tax assets:                                                     

	Net operating loss carryforward  $1,817,757  $1,349,368        
	Accounts receivable reserve          11,259      10,586 

	Other                                22,643       7,649 

	Total deferred tax assets         1,851,659   1,367,603 

	Valuation allowance for                            
	deferred assets                  (1,697,033) (1,155,528) 

	Deferred tax assets                $ 154,626 $  212,075 

	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 $12,083, $10,108 and $7,310 in 1996, 1995 and 1994,
respectively, by the Company.  In addition, discretionary
compensation expense recognized by the Company at December 31,
1996 was approximately $18,000.


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.

In connection with the ownership of the Massena Port Facility,
the Company has been negotiating over an extended period of
time, the details of a proposed consent order issued by the
State of New York Department of Environmental Conservation.  In
March of 1997, the Company signed the consent order which
requires the payment of a $5,000 penalty and to provide
remediation of any contamination at the site.  Due to the time
of year, the Company is unable to determine the extent of any
contamination.  The Company is planning to perform tests of the
site in the spring, at which time it will be in a better
position to determine the extent of any contamination.