We proposed to demonstrate the effectiveness of a catalytic membrane reactor (a ceramic membrane combined with a catalyst) to selectively produce methanol by partial oxidation of methane. Methanol is used as a chemical feedstock, gasoline additive, and turbine fuel. Methane partial oxidation using a catalytic membrane reactor has been determined as one of the promising approaches for methanol synthesis from methane. In the original proposal, the membrane was used to be used to selectively remove methanol from the reaction zone before carbon oxides form, thus increasing the methanol yield. Methanol synthesis and separation in one step would also make methane more valuable for producing chemicals and fuels. The cooling tube inserted inside the membrane reactor has created a low temperature zone that rapidly quenches the product stream. This system has proved effective for increasing methanol selectivity during CH[sub 4] oxidation, and we are using and modifying this non-isothermal, non-permselective membrane reactor.