"Coal seam gas" is more often called "coal bed methane", at least in North America. Coal contains methane gas that is adsorbed onto the coal. Most of it is of biogenic origin, meaning it was created by bacteria that feed on the coal. In many areas of the world, it naturally leaks out of the coal and in places burns naturally, sometimes setting the coal on fire. These types of coal bed fires can burn for decades. http://en.wikipedia.org/wiki/Coal_seam_fire
Also see:
http://v-c-s.org/news-events/news/new-methodology-capture-coal-bed-methane-seeps
"Mining" it (and it isn't really mined- it is recovered with a drill and a well) is probably the most responsible thing to do in many cases. Wherever coal is already leaking methane to the surface, or wherever the coal is going to be strip mined or recovered with an underground mine it is best to recover the methane rather than the alternative, which is to allow the methane to vent to the atmosphere. There are significant amounts of methane contained in this coal, for example, the Powder River Basin in Wyoming has coal that is often strip mined, and is estimated to contain recoverable methane of anywhere from 1 to 22 Trillion cubic feet of methane. Wasting that methane by allowing it to be vented to the atmosphere, either naturally or by coal mining operations would have a significant affect on global climate because methane is a greenhouse gas.
http://waterquality.montana.edu/docs/methane/cbmfaq.shtml#how_much_methane_gas_is_estimated_will_be_extracted_from_the_powder_river_basin
Methane is an odorless non-toxic gas composed of carbon and hydrogen. It is not flammable unless the concentration reaches more than 5%. As an energy source it is better for the environment than oil or coal, because it creates much more energy with considerably lower carbon output. It can be used to power automobiles, trucks, motorcycles, and even airplanes and ships. In other words just about any internal combustion engine. Very little modification is needed to use methane (CNG) in an internal combustion engine. It is much cheaper to use than gasoline and is better for the environment.
http://naturalgasvehicles.com/
The primary use of methane is generation of electricity. Currently the low prices of natural gas are impacting the electric generation industry to the extent that coal mining companies who supply the other large source of fuel for electric power plants, are having trouble surviving economically. In the United States there is currently an oversupply of natural gas.
http://www.naturalgas.org/overview/uses_eletrical.asp
Some of the other uses of methane are for synthesis of fertilizer, so most corn that is made into ethanol is actually using methane as a source of the nitrogen fertilizer that helps grow the corn. http://www.ehow.com/facts_7014969_methane-combined-nitrogen-make-fertilizer_.html Many ethanol plants use methane to fire the boilers that distill the ethanol. http://seekingalpha.com/article/33925-natural-gas-investors-to-benefit-from-global-ethanol-boom
According to the EIA, about half of the homes in the United States use methane as their primary source of heating, and also use it for heating water in water heaters. Clothes dryers are another common household use, along with cooking. Industry uses methane (natural gas) as an energy source in the manufacture of steel, glass, paper, clothing, brick, and many more things. Natural gas is a raw material in paint, plastics, antifreeze, dyes, medicines, and explosives.
There are some environmental downsides to coal bed methane. Often the methane is trapped in the coal by hydrostatic pressure. In order to get the methane to desorb from the coal, the coal must first have the water pumped out of it. This water has been a disposal issue in many places because it is is in large volumes and sometimes contains dissolved minerals that make it unusable as drinking water or irrigation water. In many areas there have been solutions found for this issue. http://wrri.nmsu.edu/conf/forum/CBM.pdf and http://ipec.utulsa.edu/Conf2004/Papers/kuipers_machardy_merschat_myers.pdf While the majority of coal bed methane is probably not produced from coal that will eventually be mined, the same issue pertains to coal mining operations, since any coal that will be mined must be dewatered (releasing the methane) before it can be mined.