In the asphaltene and preasphaltene studies samples obtained from the GFETC have been analyzed for carbonyl content with hydroxylamine to form an oxide. The hydroxyl (phenolic) oxygen comprises about 50% of the total oxygen with carbonyl groups are 20 to 25% of the total. Some 70 to 80% of the total oxygen has been accounted for by these two functionalities. These data explain why virtually no ethers have been found in recent samples reacted. A number of samples will be analyzed for carbonyl to determine how representative these results are. In the ether cleavage studies a sequence of ether cleavage reactions preceded by methylation was carried out. After reductive ether cleavage, the methoxyl groups were removed with boron tribromide. The hydroxyl titer determined by acetylating did not change significantly during this procedure indicating that phenolic ethers were not preventing ether cleavage in these samples. Our current efforts are focused on the lack of reduction of carbonyl groups during the reductive treatment. The catalytic role of H/sub 2/S in the liquefaction of low rank coal was studied. The conversion of diphenylmethane and diphenyl ether, two models for crucial bonds to be ruptured during coal liquefaction, have been examined by varying the concentrations of H/sub 2/, H/sub 2/S and S in relation to the compound under study. The diphenylmethane study is more advanced, and the optimum conversion conditions together with products are determined. Sulfur exhibits a molecular cracking role and H/sub 2/S provides hydrogen atoms to limit the formation of high molecular weight compounds. The optimum conversion conditions as now envisioned consist of a two-stage reactor system with H/sub 2/S-S as reactants in the first stage and H/sub 2/ in the second one. The operating temperature of 450/sup 0/C is better than 425/sup 0/C. An appendix has been entered separately.