Abstract: The present invention is directed to methods for converting lower alkanes and alkenes to the corresponding lower alkanols and diols. In the methods of the present invention, a gaseous halogen, preferably bromine, is produced by decomposing a metal halide in a liquid having a melting point below and a boiling point above the decomposition temperature of the metal halide. The preferred liquid is molten, hydrated ferric chloride maintained at a temperature between about 37-280.degree. C. The lower alkane or alkene is halogenated in a gas phase reaction with the produced halogen. The alkyl halide or alkyl dihalide is contacted with a metal hydroxide, preferably an aqueous solution of ferric hydroxide, to regenerate the metal halide and produce the corresponding lower alkanol or diol. The present invention is particularly efficient for converting methane to methanol using ferric bromide to provide the halogen.