Methods for enhancing the flow behavior and stability of hydrothermally treated slurry fuels. A mechanical high-shear dispersion and homogenization device is used to shear the slurry fuel. Other improvements include blending the carbonaceous material with a form of coal to reduce or eliminate the flocculation of the slurry, and maintaining the temperature of the hydrothermal treatment between approximately 300.degree. to 350.degree. C.
Work on the invention described herein was funded in part by the U.S. Department of Energy, Cooperative Agreement Nos. DE-FC21-83FE60181, DE-FC21-86MC10637, DE-FC21-93MC30097, and DE-FC21-93MC30098. The U.S. Government may have certain rights in the invention.