Abstract: The invention is a method of producing oil soluble surfactants from lignin which comprises reacting benzyl alcohol with lignin phenol at elevated temperature in the presence of a non-nucleophilic basic catalyst to produce a lignin phenol reaction product, and sulfonating the lignin phenol reaction product to produce an oil soluble lignin surfactant, said lignin phenol produced by placing lignin in contact with water, converting the lignin into low molecular weight lignin phenol by reducing the lignin in the presence of a reducing agent of carbon monoxide or hydrogen which creates a reduction reaction mixture comprising oil soluble lignin phenol, said reduction occurring at a temperature greater than about 200.degree. C. and a pressure greater than about 100 psi, and recovering the oil soluble lignin phenol from the reduction mixture.

Abstract: The invention is a method of producing oil soluble surfactants from lignin which comprises reacting an alkylphenol having an alkyl chain of about 5 to about 20 carbon atoms with formaldehyde at elevated temperature to produce an intermediate product and reacting the intermediate product at an elevated temperature with a lignin phenol sulfonate to produce an oil soluble lignin surfactant, said lignin phenol sulfonate produced by placing lignin in contact with water, converting the lignin into low molecular weight lignin phenol by reducing the lignin in the presence of a reducing agent of carbon monoxide or hydrogen which creates a reduction reaction mixture comprising oil soluble lignin phenol, said reduction occurring at a temperature greater than about 200.degree. C. and a pressure greater than about 100 psi, recovering the oil soluble lignin phenol from the reduction mixture and sulfonating the lignin phenol to produce lignin phenol sulfonate.