An air compressor system includes a compressor having an intake end and a discharge end, the compressor operable to draw in atmospheric air at the intake end and to discharge a flow of compressed air from the discharge end, the flow of compressed air including a flow of entrained water vapor and lubricant. The system further includes a separator operable to remove a portion of the entrained water vapor and lubricant from the flow of compressed air, the separator discharging a flow of dry compressed air and a flow of effluent which includes the separated water vapor and lubricant. Further, the system includes an electric heater configured to receive the removed effluent from the separator at an entrance to the electric heater and to vaporize the removed effluent.