NOVELTY - Biodegrading contaminated water from a oil well effluent stream involves: separating stream into crude oil stream and contaminated water stream (1); feeding fraction of the contaminated water stream to an irrigation system (2) of a cascaded series of soil beds (4) in which one saline tolerant cellulosic crop (5) is planted, where cascade of soil bed (4) acts as a cascade of biological purification filters for stepwise reduction of the crude oil and metal content of the contaminated water stream; growing cellulosic crop on the soil beds, followed by harvesting and converting into biofuel.    USE - For using contaminated water from a well effluent stream produced from a crude oil and contaminated water containing earth layer, for irrigating a reed and/or another saline tolerant cellulosic crop selected from reed, eucalyptus trees or tamaris (preferably Phragmites australis, Hordeum vulgare, Leucaena, Atriplex hastate, Hordeum marinum, Sporobolus kentrophyllus, Acacia, Eucalyptus, Prosopis, Spartina anglica, Aristida, Phoenix, Tamarix Zostera, Aeluropus, Panicum antidotale or Mangrove); and for converting crop into a compound of a biofuel and/or other biochemical composition (claimed).    ADVANTAGE - The biological treatment by reed beds is cost efficient and environmentally-friendly alternative to the current method of disposing produced contaminated water, which is deep well disposal. The reeds are good option for growing biomass. Levulinic acid production is a good option for converting reeds into useful compounds. The levulinic acid production process makes it possible that also inputs from other sources may be used (such as municipal waste, agricultural waste), which implies that on the long term a far larger quantity of levulinate acid may be produced.    DETAILED DESCRIPTION - Method of using contaminated water from a well effluent stream produced from a crude oil and contaminated water containing earth layer, involves: a) separating the well effluent stream in an oil-water separator assembly into a crude oil stream and a contaminated water stream (1) with capped fractions of contaminants, such as crude oil, salt and metals; b) feeding at least a fraction of the contaminated water stream to an irrigation system (2) of a cascaded series of soil beds in which at least one saline tolerant cellulosic crop (5) is planted, where cascade of soil beds (4) acts as a cascade of biological purification filters for stepwise further reduction of the crude oil and metal content of the contaminated water stream; c) growing the at least one cellulosic crop on the soil beds, where the contaminated water stream is used to irrigate and mature the cellulosic crop; d) harvesting at least one mature cellulosic crop from at least one of the soil beds; and e) converting cellulosic material in the harvested mature crop into a compound of a biofuel and/or other biochemical composition by a chemical conversion process.    DESCRIPTION OF DRAWING(S) - The figure shows general principle of reed bed water purification technology:    Contaminated water stream (1)    Irrigation system (2)    Soil beds (4)    Cellulosic crop (5)    Permeable drainage pipes (7)    Impermeable liner (8)