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Coalbed methane (CBM) has become an increasingly important source of unconventional natural gas in the US within a span of a decade. In 1995, nearly 144 bcf of CBM was produced in the Appalachian basin at a value of about $260 million. From 1992 to 1995, CBM production in the central northern Appalachian basin quadrupled to nearly 31.3 bcf/year at a value of over $55 million, which represents only about 0.2% of the estimated technically recoverable CBM resource. Legal aspects of CBM ownership and environmental problems such as water disposal will become important issues to resolve in the various Appalachian states.