Coalbed methane (CBM or coal-bed methane), coalbed gas, or coal seam gas (CSG) is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in United States, Canada, Australia, and other countries. The term refers to methane absorbed into the solid matrix of the coal. It is called 'sweet gas' because of its lack of hydrogen sulfide. The presence of this gas is well known from its occurrence in underground coal mining, where it presents a serious safety risk. Coalbed methane is distinct from a typical sandstone or other conventional gas reservoir, as the methane is stored within the coal by a process called adsorption. The methane is in a near-liquid state, lining the inside of pores within the coal (called the matrix). The open fractures in the coal (called the cleats) can also contain free gas or can be saturated with water. Unlike much natural gas from conventional reservoirs, coalbed methane contains very little heavier hydrocarbons such as propane or butane, and no natural-gas condensate. It often contains up to a few percent carbon dioxide. Coalbed methane is generally formed due to thermal maturation of kerogen and organic matter. However, coal seams with regular groundwater recharge see methane generated by microbial communities living in situ. Coalbed methane grew out of venting methane from coal seams. Some coal beds have long been known to be "gassy," and as a safety measure, boreholes were drilled into the seams from the surface, and the methane allowed to vent before mining. Coalbed methane as a natural-gas resource received a major push from the US federal government in the late 1970s. Federal price controls were discouraging natural gas drilling by keeping natural gas prices below market levels; at the same time, the government wanted to encourage more gas production. The US Department of Energy funded research into a number of unconventional gas sources, including coalbed methane. Coalbed methane was exempted from federal price controls, and was also given a federal tax credit.

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