NOVELTY - Converting carbonaceous material into methane-rich fuel gas, involves: simultaneously heating in a hydrogasification reactor the carbonaceous material in the presence of both hydrogen and steam, at a temperature and pressure to generate a stream of methane and carbon monoxide rich product gas, where 0.2-40% of methane on a dry mole basis is generated; and optionally feeding the product gas to a shift reactor, where the carbon monoxide rich gas product reacts with steam to produce hydrogen.    USE - For converting carbonaceous material into methane-rich fuel gas. The carbonaceous material is selected from municipal waste, biomass, wood, coal, biosolids, or natural or synthetic polymer (claimed).    ADVANTAGE - The process provides a new method for producing synthetic natural gas based on a combination of hydrogasification and steam pyrolysis reactions. The configuration of the process allows the use of recycled hydrogen as feed, thus eliminating the hydrogen supply problem. This configuration also allows considerable control over the final product gas composition. The slurry form eliminates the need for cumbersome reactor feed systems such as a lock hopper. This also simplifies feedstock processing since drying the feed is not necessary. The steam hydrogasification process can operate without a) reaction catalysts and/or other initiating agents e.g. hot solids; b) without the injection of oxygen (i.e. partial oxidation systems) prior to the SHR or during the SHR step; and/or c) without preheating the carbonaceous material prior to entry into the SHR. The steam hydrogasification of carbonaceous feedstocks results in improved carbon conversion compared to hydrogasification. The hydrogen produced by the shift reactor is recycled back into the hydrogasification reactor. The reactor generates methane 10-40 (preferably 30-40)% on a mole basis.    DETAILED DESCRIPTION - An INDEPENDENT CLAIM is included for an apparatus for converting carbonaceous material into methane-rich fuel gas, comprising: a steam hydrogasification reactor, where the steam hydrogasification reactor is capable of generating 0.2-40% methane on a dry mole basis.