Abstract: A method of using contaminated water from a well effluent stream produced by oil wells to produce biofuel and/or other biochemical compositions comprises: a) separating the well effluent stream in an oil-water separator assembly into a crude oil stream and a contaminated water stream with capped fractions of contaminants, such as crude oil, salt and metals; b) feeding at least a fraction of the contaminated water stream (1) to an irrigation system (2) of a cascaded series of soil beds (4) in which at least one saline tolerant cellulosic crop (5), such as reed, eucalyptus trees and/or tamaris, is planted, which cascade of soil beds acts as a cascaded biological filter for stepwise further reduction of the crude oil and metals content of the contaminated water stream; c) growing the cellulosic crop or crops (5) on the soil beds, wherein the contaminated water stream (1) is used to irrigate and mature the cellulosic crop or crops (5); d) harvesting a mature cellulosic crop (5) from at least one of the soil beds