The University of North Dakota Energy and Environmental Research Center (EERC) and the AMAX Research and Development Center are cooperating in the development of a Mild Gasification process that will rapidly devolatilize coals of all ranks at relatively low temperatures between 930[degree] and 1470[degree]F (500[degree]and 800[degree]C) and near atmospheric pressure to produce primary products that include a reactive char, a hydrocarbon condensate, and a low-Btu gas. These will be upgraded in a coal refinery''system having the flexibility to optimize products based on market demand. Task 2 of the four-task development sequence primarily covered bench-scale testing on a 10-gram thermogravimetric analyzer (TGA) and a 1 to 4-lb/hr continuous fluidized-bed reactor (CFBR). Tests were performed to determine product yields and qualities for the two major test coals-one a high-sulfur bituminous coal from the Illinois Basin (Indiana No. 3) and the other a low-sulfur subbituminous coal from the Powder River Basin (Wyodak). Results from Task 3, on product upgrading tests performed by AMAX Research and Development (R D), are also reported. Task 4 included the construction, operation of a Process Research Unit (PRU), and the upgrading of the products. An economic evaluation of a commercial facility was made, based on the data produced in the PRU, CFBR, and the physical cleaning steps.