This invention relates to a method of producing liquid hydrocarbons, preferably internal combustion engine fuels, using feedstocks of coal or methane. Depending on the nature of the feedstock it is subjected to a gasification and/or reforming process and/or water gas shift process which produces a syngas that is rich in carbon dioxide and hydrogen rather than carbon monoxide and hydrogen as in the conventional process. The carbon dioxide and hydrogen are combined in a Fischer Tropsch process to produce desired hydrocarbons and water. The energy requirements of the gasification/reforming process to produce a syngas that is rich in carbon dioxide and hydrogen is considerably less than the energy requirements for gasification/reforming process for producing the conventional carbon monoxide rich syngas. This reduction in energy consumption reduces considerably the quantities of carbon dioxide released into the atmosphere compared to conventional processes that are based on carbon monoxide rich syngas. Unreacted CO2-rich syngas can be recirculated or can also be used, in molten carbonate fuel cells, or to generate energy or steam in turbine processes such as IGCC.