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Coalbed methane is a gas that is extracted from layers of coal seams in the earth. It is usually extracted via drill holes but in the process large volumes of ground water are also brought to the surface. In the U.S., there are reports of contaminated coalbed methane water being released into the environment or ponded in both Wyoming and Montana.
The practice also raises concerns about global warming because methane is a relatively potent greenhouse gas with a high global warming potential 72 times that of carbon dioxide (averaged over 20 years) or 25 times that of carbon dioxide (averaged over 100 years), according to the IPCC's Third Assessment Report. (Note that the global warming potential of methane was estimated at 21 times that of carbon dioxide, averaged over 100 years, in the IPCC Second Assessment Report, and the 21 figure is currently used for regulatory purposes in the United States.) Methane in the atmosphere is eventually oxidized, producing carbon dioxide and water. This breakdown accounts for the decline in the global warming potential of methane over longer periods of time.
U.S. Organizations that are concerned with the environmental implications of this extraction
- Earthworks 
- Friends of the Red Desert FRD 
- Western Organization of Resource Councils WORC 
- Dogwood Initiative 
- Energy Justice Network 
South Wales activists call for inquiry into CSG expansion plans
On May 29, 2011, over 3,000 people spelt out their opposition to coal seam gas mining in the Illawarra by making a human sign in the sand at Austinmer Beach north of Wollongong. A similar event at Byron Bay also attracted thousands of participants, while Greens MP Jeremy Buckingham released video of a foamy discharge into the air from a coal seam gas well at Glen Alpine near Campbelltown. Buckingham said he's pleased the Labor Member for Keira, Ryan Park has broken ranks with the ALP over the issue and support calls for an inquiry: "We would like a halt put on the industry that would stop them going into full production phase and it would enable us to have a look at all the proposals that are on the table. There's a proposal for a massive expansion of the industry in southern Sydney and I know these companies are looking at the Illawarra Escarpment." Jess Moore from Stop CSG Illawarra has called for an indefinite ban on coal seam gas mining and a Royal Commission with powers to force politicians to give evidence.
Biogenic methane production
Despite the concerns associated with methane, companies are looking into stimulating methane production for energy use. As of May 2010, Luca Technologies is working on a large scale pilot program in an old natural gas field west of Gillette, WY, on a process called “biogenic methane production.” The process involves gravity feeding water and what the company calls “nutrients” down old methane wells to stimulate the native microbes in the coal seams to multiply and produce methane at an accelerated rate. Many believe it took millions of years for the microbes to make the methane now being extracted in the basin. Luca researchers think that with a little help, the microbes can make enough to extract methane at a profit in only a few years.
Luca started work on the idea of biogenic methane production in its lab in Golden, Colo., in 2001. After years of study, the company began an initial pilot program near Sheridan with 100 wells in 2006. In 2008, the company bought 529 old wells west of Gillette from Kennedy Oil and added them to the roster. Luca bought another 725 former Devon Energy wells in the same area. With more than 1,350 wells, Luca believes it can make an honest go at growing methane on a commercial scale in the Powder River Basin.
On January 3, 2011, the privately-held Ciris Energy said it raised series B "startup financing" to build its first commercial plant for converting underground coal to syngas. Khosla Ventures led the funding, along with existing investors Braemer Ventures, Rho Ventures, and GE Energy Financial Services. An SEC document showed that Ciris raised $23.9 million, out of a planned $63.9 million. Ciris has developed a process to biologically convert underground coal into methane, the main ingredient of natural gas.
Coalbed methane in China
Gas output from China's coal seams (coalbed methane) is set to hit 8 billion cubic metres (bcm) in 2012, according to Reuters, up from 4 bcm in 2011. Gas companies construct long and winding lateral wells that allow water to drain away and gas to flow out, a process developed after two decades of experimentation. Producers are pumping from a myriad of coal seams in Shanxi estimated to hold as much as 10 trillion cubic metres (tcm) of gas -- nearly four times China's proven gas reserves of 2.8 tcm. China is investing 100 billion yuan ($16 billion) to increase output to 16 bcm by 2015.
Coalbed methane in India
On January 4, 2011, Great Eastern Energy said it had signed an agreement with the Tamil Nadu government for the development of gas reserves lying below coal seams in the Mannargudi block in the state. Great Eastern was awarded the Mannargudi block located near Tiruchirapalli in June 2010 in the fourth round of bidding for Coal Bed Methane (CBM) blocks. Great Eastern is the first company to commercially produce CBM in India. Great Eastern is currently producing CBM from its block in Raniganj, West Bengal, and is already supplying CBM to various industrial customers in and around Asansol/Durgapur, West Bengal as well as syngas to vehicles through India Oil petrol pumps and, potentially, Bharat Petroleum outlets as well. The Mannargudi block is spread over an area of 691 sq km and the CBM resource is estimated at 0.98 trillion cubic feet.
On January 25, 2008, Peabody Energy and GreatPoint Energy announced that Peabody would be the primary supplier of coal for GreatPoint Energy's gasification stations, which GreatPoint plans to construct in the Powder River Basin.  As of spring 2009, GreatPoint had opened a large-scale pilot station at the Brayton Point power station in Somerset, MA and intends to take their coal gasification process to the commercial scale in the near future. 
Wyoming Prepares to Plug Coalbed Methane Sites
In June 2010 it was announced that Wyoming Oil and Gas Conservation Commission set a July 1, 2010 deadline for the Wyoming Consolidated Gas Corp. to bring 42 of the company's abandoned coalbed methane wells on state lands into compliance. It is purported that plugging the old wells will decrease the amount of coalbed methane water the flows they discharge. It has been suggested that a ban on coalbed methane wells would save 3.3 billion barrels of groundwater in the Powder River Basin.
High Plains Gas Announces Reactivation of Fitch Coalbed Methane Field
In September 2011 High Plains Gas, Inc reactivated its wells that produce coalbed methane in the Powder River Basin's Fitch Field. In the past the company produced 800 million cubic feet per day with its wells in Fitch Field.
- Energy Justice Network, "Coal-Bed Methane", web page containing links to numerous reports and studies
- Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)"Climate Change 2007: Working Group I: The Physical Science Basis: 2.10.2 Direct Global Warming Potentials", IPCC Fourth Assessment Report: Climate Change 2007, Cambridge University Press, 2007.
- "Methane," U.S. Environmental Protection Agency information page, accessed July 2010
- "Greens call for inquiry into coal seam gas mining" ABC, May 30, 2011.
- Steve McManamen, "Luca says natural gas industry is alive and well ... literally" gillettenewsrecord.net, May 17, 2010.
- Martin LaMonica, "Coal-to-natural gas outfit Ciris Energy funded" GreenTech, January 3, 2010.
- David Stanway, "China's coalbeds spur unconventional gas supply boom," Reuters, April 11, 2012.
- "Great Eastern Energy in pact with TN for gas block development" Business Standard, January 4, 2011.
- "GreatPoint Energy announces coal supply partnership with Peabody Energy and enters into agreement to build natural gas manufacturing facilities in Powder River Basin", "GreatPoint Energy" press release, January 25, 2008.
- "Peabody Energy acquires equity interest in GreatPoint Energy", "Peabody Energy" press release, January 25, 2008.
- "Wyoming prepares to plug CBM wells in rugged terrain" Dustin Bleizeffer, June 14, 2010.
- "High Plains Gas Announces Reactivation of Fitch Coal Bed Methane Field" MarketWatch, September 29, 2011.
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