In the second year of this project, we continued our effort to develop low temperature decarboxylation catalysts and investigate the behavior of these catalysts at different reaction conditions. We conducted a large number of dynamic measurements with crude oil and model compounds to obtain the information at different reaction stages, which was scheduled as the Task2 in our work plan. We developed a novel adsorption method to remove naphthenic acid from crude oil using naturally occurring materials such as clays. Our results show promise as an industrial application. The theoretical modeling proposed several possible reaction pathways and predicted the reactivity depending on the catalysts employed. From all of these studies, we obtained more comprehensive understanding about catalytic decarboxylation and oil upgrading based on the naphthenic acid removal concept.