The largest volume waste stream associated with oil and gas production is produced water. A survey conducted by the American Petroleum Institute estimated that 20.9 billion barrels of produced water were disposed of in 1985 (Wakim 1987). Of this total, 91% was disposed of through disposal wells or was injected for enhanced oil recovery projects. Treatment and disposal of produced water represents a significant cost for operators. A relatively new technology, downhole oil/water separators (DOWS), has been developed to reduce the cost of handling produced water. DOWS separate oil and gas from produced water at the bottom of the well and reinject some of the produced water into another formation or another horizon within the same formation, while the oil and gas are pumped to the surface. Since much of the produced water is not pumped to the surface, treated, and pumped from the surface back into a deep formation, the cost of handling produced water is greatly reduced. When DOWS are used, additional oil may be recovered as well. In cases where surface processing or disposal capacity is a limiting factor for further production within a field, the use of DOWS to dispose of some of the produced water …

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