We have made excellent progress toward a practical route from field butanes to MTBE, the oxygenate of choice for high-octane, clean-burning, environmentally acceptable reformulated gasoline. We have evaluated two proprietary process possibilities with a potential commercial partner and have conducted a joint catalyst evaluation program. The first of the two potential processes considered during the past quarter utilizes a two-step route from isobutane to tert-butyl alcohol, TBA. Not only is TBA an intermediate for MTBE production but is equally applicable for ETBE-an oxygenate which utilizes renewable ethanol in its` manufacture. In the two-step process, isobutane is oxidized in a non-catalytic reaction to a roughly equal mixture of TBA and tert-butyl hydroperoxide. TBHP, eq. 1. We have developed an inexpensive new catalyst system based on an electron-deficient macrocyclic metal complex that selectively converts TBHP to TBA, eq. 2, and meets or exceeds all of the process criteria that we have set.