The very large reserves of methane, which often are found in remote regions, could serve as a feedstock for the production of chemicals and as a source of energy well into the 21st century. Although methane currently is being used in such important applications as the heating of homes and the generation of hydrogen for ammonia synthesis, its potential for the production of ethylene or liquid hydrocarbon fuels has not been fully realized. A number of strategies are being explored at levels that range from fundamental science to engineering technology. These include: (a) stream and carbon dioxide reforming or partial oxidation of methane to form carbon monoxide and hydrogen, followed by Fischer-Tropsch chemistry, (b) the direct oxidation of methane to methanol and formaldehyde, (c) oxidative coupling of methane to ethylene, and (d) direct conversion to aromatics and hydrogen in the absence of oxygen. Each alternative has its own set of limitations; however, economical separation is common to all with the most important issues being the separation of oxygen from air and the separation of hydrogen or hydrocarbons from dilute product streams. Extensive utilization of methane for the production of fuels and chemicals appears to be near, but current economic uncertainties limit the amount of research activity and the implementation of emerging technologies. (C) 2000 Elsevier Science B.V. All rights reserved.