A reactor system which selectably produces from carbonaceous fuel, combined heat and power (CHP) or syngas and CHP, and in either mode a stream of greater than 95% CO2 for sale or sequestration. Also included are plurality of reactors, ash separation system, and feedback control system. The reactors comprise 1) a fuel reactor selectably operated in full oxidation mode for production of CHP, or in partial oxidation mode to produce syngas to produce biofuels and CHP; 2) a burn-off reactor fully oxidizes char or carbon from the fuel reactor producing CO2; and 3) an optional regeneration reactor reoxygenating oxygen carrier from the first two reactors which is returned to the fuel reactor. The feedback control system comprises an accumulator and controllable elements to apportion oxygen carrier between fuel and burn-off reactors and extract oxygen carrier and heavy ash. This ash and ash from the regenerator products are sold or disposed.