The objective of the program described in this report is to develop a noncatalytic process for the hydropyrolysis of lignite and coal to produce high-octane blending gasoline constituents, methane, ethane and carbon oxides. The technical program has been divided into tasks involving planning, construction, and operation of a bench-scale unit, construction and operation of a process development unit (PDU), and a final technoeconomic evaluation. The construction of the PDU has been completed, and 13 runs were made at operating pressures ranging from 1000 to 2000 psig. The value of the severity function, a measure of the time-temperature history of reactants passing through the reactor, was 0.265 or less. At the level of thermal severity and hydrogen partial pressures used, the fractions of feed carbon converted to methane, light gases, and hydrocarbon liquids were similar to those that would have been obtained in the bench-scale unit when operated under similar conditions. The yields of carbon oxides were, however, high. To obtain a carbon conversion appropriate to a balanced-plant mode of operation requires operating conditions corresponding to a value of the severity function of 0.5 or greater. The bench-scale program was continued, and 28 trial runs were made during the reporting period to study the use of hydrogen preheated to pyrolysis temperatures, the effect of changing particle size, and the result of processing with syngas and steam. A few runs were also made using North Dakota lignite catalyzed with bentonite clay and iron oxide. Bentonite clay, when added to feed lignite, catalyzed hydrotreating reactions, greatly reducing the amounts of phenols and cresols appearing in the products.