TECHNOLOGY FOCUS - CHEMICAL ENGINEERING - Preferred Process: The feedstock is fed to the partial oxidation reactor in water slurry. The process also involves using a precipitated iron catalyst in the Kolbel-Engelhardt (K-E) reactor. The catalyst is spray dried. The water added in conjunction with residual oil is saturated steam at the gasifier operating pressure. The hydrogen to carbon monoxide ratio is 0.5-2.5. The hydrogen is separated from the partial oxidation reactor effluent using a membrane that is selectively permeable to hydrogen or using pressure swing absorption. The K-E reactor is maintained at 450-550 (most preferably 480-500)degreesF and at 150-500 psig (most preferably 300-400 psia). The water fed to the K-E reactor is saturated steam at the operating pressure of the reactor. The molar ratio of saturated steam to carbon monoxide fed to the K-E reactor is 0.5-1.5 most preferably 0.9-1.1. The K-E reactor is operated at a space velocity of 2-10 normal liters of combined steam and carbon monoxide per hour per gram of catalyst, most preferably 3-5 normal liters per hour per gram of catalyst. The superficial velocity of the gases fed to the K-E reactor is 2-20 most preferably 8-12 cm/s. The K-E reactor is a three-phase slurry bubble column reactor.    TECHNOLOGY FOCUS - INORGANIC CHEMISTRY - Preferred Catalyst: The catalyst contains potassium or copper. It also contains a compound useful for increasing attrition resistance. The weight ratio of potassium to iron is 0.005-0.015 most preferably 0.008-0.01. The weight ratio of copper to iron is 0.005-0.02 most preferably 0.009-0.012. The catalyst particles have a diameter of 1-150 (most preferably 20-80) microns. EXAMPLE - 1000 Tons petroleum coke were mixed with water to form a slurry containing 62 wt.% solids. The slurry was fed to a partial oxidation reactor along with 1002 tons of 95% oxygen. The gases leaving the reactor at 2445 degrees F and 400 psia comprised (mmscf) hydrogen (28.7), carbon monoxide (45.9), carbon dioxide (8.7), methane (0.2), water (10.1), nitrogen and argon (1.7) and hydrogen sulfide (1.3). After hydrogen sulfide and water removal, 90% of hydrogen (25.8 mmscf) was removed as product. The remaining gases were fed to K-E reactor operating at 325 psia and 500 degrees F along with 22.9 mmscf saturated steam at 400 psia. Products from the K-E reactor consisted of 1728 bbl hydrocarbon containing more than 5 carbon atoms and carbon dioxide (39 mmscf). In this case, 69.9% carbon in the feedstock was removed in captured carbon dioxide and 23% of carbon was removed in the hydrocarbons.