Coalbed methane from the Fruitland Formation, San Juan Basin, New Mexico
— Douglas M. Bland

 Natural gas is the cleanest of the world's three main fossil fuels. Governor Bruce King emphasizes natural gas as the fossil fuel of choice for New Mexico in the State Energy Policy, released in 1991. Coalbed methane, also called coal seam gas, is a type of natural gas that is generated within and produced from coal. Coalbed methane is greatly expanding New Mexico's already substantial natural gas reserves and production capability. The Fruitland Formation of the San Juan Basin contains up to 50 trillion ft³ of coalbed methane in place, and half of this may be producible reserves. Fruitland pore systems range from overpressured to underpressured, which greatly affects gas and water production rates and carbon dioxide content. The overpressured area, in the north-central part of the basin, contains the highest rate coalbed methane wells in the world, with some producing over 20 million ft³ of gas per day (MMcfd). Most of these wells are completed using an open hole cavity created by sloughing coal which is then removed. Normally pressured and underpressured coals are completed through cemented casing and hydraulically stimulated. The San Juan Basin is the largest coalbed methane producing area in the world, with more than 380 billion ft³ produced in New Mexico as of September 1991, when almost 1100 wells were producing over 700 MMcfd. Two new major pipeline projects are under construction by El Paso Natural Gas Company and Transwestern Pipeline Company to transport additional gas out of the San Juan Basin. Meridian Oil accounts for about two-thirds of total coalbed methane production, and other major producers include Amoco, Blackwood and Nichols, Phillips Petroleum and Nassau Resources. Coalbed methane is eligible for a federal tax credit, worth about $0.87 per MMBtu (about 1 Mcf) in 1990, if produced before 2003 from wells drilled prior to 1993. Coalbed methane provides substantial benefits to New Mexico through increased natural gas reserves, economic activity and revenues.