A novel autothermal reforming process, basically a circulating fluidized-bed membrane reformer (CFBMR) with continuous catalyst regeneration and gas-solid separation, is developed. Direct contact between cold feeds and hot circulating catalyst is found to be the best configuration. Using statistical correlations and cost factors, hydrogen economics is evaluated. Hydrogen production cost decreases as the plant size increases. For a 100 kg-H-2/day plant, the costs are $2.05 and $2.22/kg-H-2 for methane and heptane feeds, respectively. This is lower than the literature values of $9.10/kg-H-2 by steam methane reforming based on the present generation of fixed-bed reformers. For typical 214 ton-H-2/day industrial plants, the costs using our novel CFBMR are $0.50 and $0.66/kg-H-2 for methane and heptane feeds, respectively, which is lower than the industrial cost of $0.74-0.97/kg-H-2 for steam methane reforming using the fixed-bed configuration. The sensitivity analysis of the effect of the price of hydrocarbons on the hydrogen production cost shows that the cost of hydrocarbons affects the hydrogen economics significantly. Cost comparison shows that this novel ACFBMR can be a more efficient and more economical pure hydrogen producer. (C) 2006 Curtin University of Technology and John Wiley & Sons, Ltd.