Fresh water scarcity and increasing demand are worldwide concerns and are being addressed by a number of water management initiatives in Alberta and Canada. In 2003, 0.3 billion m3 of produced water was injected into disposal wells associated with oil and gas production in Alberta. This volume of water is a potential resource for recycling and beneficial reuse in Alberta, which would have a significant impact on sustainable development in Alberta. This water must first be treated to meet water quality requirements and regulatory guidelines for specific applications. This paper provides a comprehensive technical and economic review of water treatment technologies and shows that water treatment processes are commercially available. Although the cost of implementing suitable treating processes to meet drinking water quality guideline is estimated at three times the current cost of municipal water supply in Alberta, it is more feasible to recycle produced water for other purposes, such as agricultural or petroleum application (i.e., waterflooding, etc.). This is because water quality guidelines for most other applications are not as stringent as that for drinking water and there is increasing public resistance for industry to use fresh water for commercial applications. A multi-disciplinary research and development team studying water recycle and beneficial reuse is necessary to look into these issues. The University of Calgary is set to collaborate on such projects due to the current research emphasis on sustainable energy and environmental impact. Collaboration between the government, industry and academia to develop initiatives aimed at reducing fresh water is possible in Calgary for several reasons. One is the proximity of many major oil and gas companies in this city, which would allow for easy communication. Another is the fact that the current price of oil would not inhibit producing companies from investing in this kind of research. The result can be well-developed initiatives to treat and recycle produced water for beneficial reuse, thus reducing fresh water demand for many applications in the petroleum and agricultural industries.