A method of converting carbon containing compounds such as coal, methane or other hydrocarbons into a liquid hydrocarbon fuel utilizes a high pressure, high temperature reactor which operates upon a blend of a carbon compound including CO2 and a carbon source, a catalyst, and steam. Microwave power is directed into the reactor. The catalyst, preferably magnetite, will act as a heating media for the microwave power and the temperature of the reactor will rise to a level to efficiently convert the carbon and steam into hydrogen and carbon monoxide.