AbstractThe economics of liquefying coal by catalytic hydrogenation have been examined for five cases. the first three cases determined the effect upon the cost of syncrude of producing a syngas from coal and steam suitable for making hydrogen at pressures of 44·7 psia, 500 psia and 1000 psia. In the fourth case a carbonization step was included which produced a char suitable for gasification and a liquid product which was upgraded to a syncrude consuming 2000 SCF of hydrogen per bbl. In the last case all of the coal was liquefied and a vacuum bottoms material gasified to produce hydrogen. For all five cases the cost of syncrude was calculated using discounted cash flow (DCF) rates of 10, 15, and 20 per cent coal costs of $10, $20, $30 and $40 per ton, and several methods of by‐product fuel valuation.Sensitivity analysis was performed on the operating costs, plant life, operating attainment schedule, and method of financing. Finally, a cost comparison between syncrude and natural World oil in the years 1985 and 1990, assuming yearly inflation rates of 5 and 10 per cent, has been ma