This second Topical Report describes the work that was completed between January 1, 1989 and December 31, 1990 in a Cooperative Agreement between Texaco and the US Department of Energy that began on September 30, 1987. During the period that is covered in this report, the development and optimization of in-situ and external desulfurization processes were pursued. The research effort included bench scale testing, PDU scoping tests, process economic studies and advanced instrument testing. Two bench scale studies were performed at the Research Triangle Institute with zinc titanate sorbent to obtain data on its cycle life, sulfur capacity, durability and the effect of chlorides. These studies quantify sulfur capture during simulated air and oxygen-blown gasification for two zinc titanate formulations. Eight PDU runs for a total of 20 days of operation were conducted to evaluate the performance of candidate sorbents for both in-situ and external desulfurization. A total of 47 tests were completed with oxygen and air-blown gasification. Candidate sorbents included iron oxide for in-situ desulfurization and calcium based and mixed metal oxides for external desulfurization. Gasifier performance and sorbent sulfur capture are compared for both air-blown and oxygen-blown operation.