Coal demethanation is a process by which methane gas is removed from coal deposits. The principal objective of coal demethanation, since its introduction in 1943, has been to remove the safety hazard the gas poses to miners. Methane is the principal component of natural gas and thus presents similar hazards. Methane is generated in coal during coalification, the process in which fossilized vegetation is gradually converted from low-rank to high-rank coal. As much as 1400 m3 of methane is produced per tonne of coal during coalification, but only about 2% is retained in the coal. The highest recorded gas content of coal in Canada is 21 m3/t, measured in Canmore, Alberta.

A relatively recent coal demethanation technique does not require the presence of a coal mine. The technique can be used to improve mine safety (by removing a major portion of the methane before the coal is mined) as well as to collect methane for use as a fuel. To gain access to the methane, a borehole is usually drilled from the ground surface or boreholes are drilled from a shaft. To start the extraction, the conditions under which the methane is adsorbed on the coal must be changed, so that the coal will retain less gas. This is typically achieved by reducing the hydrostatic pressure on the coal by removing water. In order to increase the typically low permeability of coal seams, techniques such as seam fracturing (a technique borrowed from the oil industry) are employed. Then, sufficient pressure is generated in the system to move the methane to the well, where it is collected without any suction. With no suction applied, there is no air contamination of the methane. Unlike the gas produced in a more conventional mine methane drainage system, the gas produced by a virgin-coal demethanation system generally contains 95% or more methane. Such a gas has a heat value similar to that of natural gas (37 MJ/m3) and can be mixed with it. This gas can be used in all applications where natural gas is used, except for some chemical processes. Research indicates that techniques are now sufficiently advanced to make a commercial project feasible.