How do I send an email to all users that has flagged a node using rules? I need to send an email when there is a new comment on a node to all users that have flagged that node? How do I do this?

The flag is called "Follow" and the content type is "Blog"
The exported code assumes use of Flag module to have a flag type as "follow" attached to Blog content type.

As a summary:


set rule event as "After saving a new comment of type Blog comment". 
leave condition as none.   
set actions as

step 1: get all users
who have flagged "Fetch users who have flagged a Node".   
step2: loop
through the list.

step2.1: send email




Here is the export for my Rule configured as per your requirement.

{ "rules_email_on_blog_comment" : {
    "LABEL" : "Email On Blog Comment",
    "PLUGIN" : "reaction rule",
    "TAGS" : [ "blog", "email" ],
    "REQUIRES" : [ "flag", "rules", "comment" ],
    "ON" : { "comment_insert--comment_node_blog" : { "bundle" : "comment_node_blog" } },
    "DO" : [
      { "flag_fetch_users_node" : {
          "USING" : { "flag" : "follow", "node" : [ "comment:node" ] },
          "PROVIDE" : { "users" : { "users" : "Users who flagged" } }
        }
      },
      { "LOOP" : {
          "USING" : { "list" : [ "users" ] },
          "ITEM" : { "list_item" : "Current list item" },
          "DO" : [
            { "mail" : {
                "to" : "[list-item:mail]",
                "subject" : "New Comment",
                "message" : "There is a new comment on the flagged blog post",
                "from" : "[site:mail]",
                "language" : [ "" ]
              }
            }
          ]
        }
      }
    ]
  }
}