The thermal decomposition of natural gas forms the basis for the production of hydrogen with reduced CO2 emission. The hydrogen can be used to reduce CO2 from coal-fired power plants to produce methanol which can be used as an efficient automotive fuel. The kinetics of methane decomposition is studied in a one inch diameter tubular reactor at temperatures between 700 and 900 degrees C and al pressures between 28 and 56 atm. The Arrhenius activation energy is found to be 31.3 kcal/mol of CH4. The rate increases with higher pressures and appears to be catalyzed by the presence of carbon particles formed. The conversion increases with temperature and is equilibrium limited. A thermodynamic study indicates that hydrogen produced by methane decomposition while sequestering the carbon produced requires the least amount of process energy with zero CO2 emission. Application to methanol synthesis by reacting the hydrogen with CO2 recovered from coal burning power plant stack gases can significantly reduce CO2 from both the utility and transportation sectors.