Progress reports are presented for the following four tasks: structural studies of lignite-derived asphaltene and preasphaltenes; ether cleavage studies; studies of denitrogenation caused by CO and water reactions; and electron transfer catalysis studies. Some of the observations are: major differences between asphaltenes and preasphaltenes is that the molecular weight maximizes near 1500 g/mol for the preasphaltenes compared to 400 g/mol for the asphaltenes; asphaltenes have little or no aliphatic or aryl aliphatic ethers whereas preasphaltenes have significant amounts; asphaltenes have major amounts of diaryl ethers and smaller amounts of dibenzofurans while the reverse is true for preasphaltenes; there is a general decrease in diaryl ethers as the temperature of preparation is increased for both the asphaltenes and the preasphaltenes; for asphaltenes a corresponding increase in dibenzofurans is seen but for preasphaltenes these ethers are roughly constant with temperature; lack of cleavage of up to 54% of the ether originally present remains a critical problem; the observed increase in molecular weight particularly with asphaltenes is inconsistent with the model structure and must be examined further; under reducing conditions at liquefaction temperatures, N,N-dimethylaniline gives the products: benzene, toluene, N-methylbenzylamine, N-methylaniline and aniline, H/sub 2/ is superior to CO-H/sub 2/O for the denitrogenation ofN,N-dimethylaniline into benzene; only the combined effect of the additives H/sub 2/S and HCO/sub 2/H can increase the yield of benzene and its reduction products; no electronic effect of the Ni/support catalyst on MgO was noted for hydrogenation, dealkylation, hydrogenolysis, dehydrogenation, except in the case of methanation.