TECHNOLOGY FOCUS - INORGANIC CHEMISTRY - Preferred Components: The hydrogenation catalyst, the reforming catalyst, the hydrocracking catalyst or the hydrotreating catalyst comprises at least one Group VIII transitional metal and/or its alloy, or combination of alloy or mixture of a Group VIII transition metal with a Group VIIB metal. The hydrogenation catalyst metal or the reforming catalyst metal is adhered to a support. The hydrogenation catalyst is ruthenium/carbon (Ru/C). The metal content for the hydrogenation catalyst is 0.1-10 wt.%. The reforming catalyst is platinum/aluminum trioxide (Pt/Al2O3). The hydrocracking catalyst metal or the hydrotreating catalyst metal is provided alone or in combination with an acidic support and/or acid. The hydrocracking catalyst is platinum on silica-alumina (Pt/SiO2-Al2O3). The first hydrogenation catalyst is Ru/C and the second hydrogenation catalyst is Ru/C or Pt/C. The aldol condensation catalyst is a copper on silica-aluminum oxide (Cu/SiO2-AlOx) catalyst. The hydrotreating catalyst is Pt/ZrPO4. The acid is hydrochloric acid, an acidic ion-exchange resin, alumina, zirconium phosphate and/or niobium phosphate.    TECHNOLOGY FOCUS - ORGANIC CHEMISTRY - Preferred Method: In the method (M1), the water-soluble fraction of the bio-oil is obtained by extracting bio-oil with water, and the ratio of bio-oil to water in the extraction is 0.1:1 to 4:1. The step of hydrogenating is conducted at a temperature of less than or equal to 200 (preferably 120-180) degrees C; and at a total pressure of 500-2000 psi (3.4-13.8 MPa). The hydrogen for the hydrogenation is generated by the reforming. The step of reforming is conducted at a temperature of 200-280 degrees C, and at a total pressure of 300-1200 psi (2.1-8.3 MPa). The method (M1) further involves hydrocracking a lignin fraction of the bio-oil with hydrogen in the presence of a hydrocracking catalyst, where the lignin fraction of bio-oil is obtained as a water-insoluble fraction from aqueous extraction of bio-oil, where a liquid hydrocarbon product is obtained from the hydrocracking. A solvent is added to the lignin fraction, where the solvent is an alcohol. The hydrocracking is conducted at a temperature of 200-600 degrees C, and at a total pressure of 800-4000 psi (5.5-27.6 MPa). The hydrogen used in the hydrocracking is generated by the reforming. The step of hydrogenating the water soluble fraction of bio-oil involves hydrogenating the water soluble fraction in a first hydrogenation in the presence of a first hydrogenation catalyst to form a first hydrogenated product; and hydrogenating at least a portion of the first hydrogenated product in the presence of a second hydrogenation catalyst to form a second hydrogenated product. At least a portion of hydrogen used in the first and second hydrogenations is generated by the reforming. The method (M1) further involves reacting, in the presence of hydrocracking catalyst, at least a portion of hydrogenated water soluble fraction prepared by hydrogenating the water-soluble fraction of the bio-oil. The step of reacting in the presence of the hydrocracking catalyst is further carried out in the presence of additional hydrogen. At least a portion of additional hydrogen used in the reacting in the presence of the hydrocracking catalyst is generated by the reforming. The reacting in the presence of hydrocracking catalyst is further carried out in the presence of an acid as dehydration catalyst, at a temperature of 250-275 degrees C and at a pressure of 700-1500 psi (4.82-10.34 MPa). The step of reacting in the presence of a hydrocracking catalyst generates hydrocarbons comprising 1-6C alkanes. The method (M1) further involves reacting, in the presence of an aldol condensation catalyst, the at least a portion of hydrogenated water soluble fraction prepared by hydrogenating the water-soluble fraction of the bio-oil, where the reacting in the presence of the aldol catalyst is carried out prior to the reacting in the presence of the hydrocracking catalyst. The reacting in the presence of aldol catalyst is carried out in batch mode or continuous flow mode. The reacting in the presence of a hydrocracking catalyst generates hydrocarbons comprising 5-9C alkanes. The method (M1) further involves hydrotreating a lignin fraction of the bio-oil with hydrogen in the presence of a hydrotreating catalyst, where the lignin fraction of bio-oil is obtained as a water-insoluble fraction from aqueous extraction of bio-oil. The hydrotreating is conducted at 200-400 degrees C. The step of hydrocracking is conducted at a total pressure of 500-1500 psi (3.45-10.34 MPa). The method (M2) further involves hydrocracking the lignin fraction with hydrogen in the presence of a hydrocracking catalyst, where at least a portion of the hydrogen generated by the reforming is used in the hydrocracking. Preferred Components: The liquid hydrocarbon product comprises gasoline grade product and/or diesel grade product; or 5-25C cycloalkanes, 5-25C alkanes, 4-25C carboxylic acids or esters and/or phenols. The second hydrogenated product comprises alcohol, diol, polyol and/or furan derivatives. EXAMPLE - A water-soluble fraction of bio-oil comprising aqueous-soluble bio-oil components (13.5 wt.%), was subsequently hydrogenated under mild hydrogenation conditions in a Parr batch reactor, in the presence of ruthenium/carbon (Ru/C) (5 wt.% Ru loading) as the hydrogenation catalyst, and using mild hydrogenation conditions at 175 degrees C and 1000 psi (6.9 MPa) total pressure. The major components in the feed were acetic acid, hydroxy acetone, furfural, various guaiacols and levoglucosan and sugars. Only carbon (25-35 wt.%) in the feed was identified. As hydrogen was consumed during the reaction, additional hydrogen was supplied to the reactor during the course of the hydrogenation to maintain a constant pressure in the reactor. Hydrogenation of the water-soluble fraction of bio-oil was carried out for 1 hour. After post-hydrogenation of propylene glycol (203.3 mmol/l), 1,2-butanediol (109.1 mmol/l), 2-butyrolactone (204.2 mmol/l) and tetrahydrofurfuryl alcohol (54.9 mmol/l), a bio-oil (A1) was produced. The bio-oil (A1) was diluted to solute (5 wt.%) and subjected to reforming in a continuous reactor in the presence of platinum on alumina (1 wt.%) as the reforming catalyst. The reforming was carried out on the product of the batch hydrogenation at a temperature of 265 degrees C and at a pressure of 800 psi (5.5 MPa). A liquid hourly space velocity (LHSV) for the process was 0.73 g of liquid fed per gram of catalyst per hour. After reforming the hydrogen selectivity of bio-oil was found to be 70% and overall carbon conversion to gas phase products was found to be 21%.