Water
Most water that is produced from a coalbed natural gas well is discharged into drainages including ponds, reservoirs or stock tanks. Surface owner agreements generally include the subject of discharge water and its uses. Coalbed natural gas water in its unaltered state usually meets or exceeds the Wyoming and Montana Department of Environmental Quality's surface water quality standards. The Federal Safe Drinking Water Act and Environmental Protection Agency (EPA) guidance is the basis for determining Wyoming and Montana's water quality standards where drinking water is protected. The Clean Water Act and EPA guidance determine Wyoming and Montana's other standards for protection of other uses of surface water including aquatic life, agriculture, irrigation and recreation.

In Wyoming, since every coalbed natural gas well must be permitted as both a gas well and a water well, the operator must obtain permits from the Wyoming Oil and Gas Conservation Commission (WOGCC) or the Bureau of Land Management (BLM) and the State Engineer's Office (SEO). Water discharges are permitted with the Wyoming Department of Environmental Quality (WDEQ).

In situations where water does not meet the Wyoming standards, WDEQ will not issue a discharge permit. If a water sample is taken after the permit has been issued and it does not meet standards, WDEQ's Water Quality Division has the authority to stop the discharge and will require the company to submit a compliance plan, which must be approved by the Water Quality Division. Potential solutions to such inappropriate discharges include: lined impoundments (evaporation ponds with protective liners); chemical treatment; or possibly re-injection of the water into other aquifers where appropriate.

In Montana, the Montana Board of Oil and Gas Conservation has the regulatory oversight of CBNG-produced water being discharged into pits or impoundments. If that produced water is to be utilized for irrigation, stock water, industrial use, etc., a beneficial use permit from the Montana Department of Natural Resources is required. If the CBNG-produced water is to be discharged into waters of the state, a National Pollution Discharge Elimination System (NPDES) permit from Montana Department of Environmental Quality is required. Montana has recently adopted numeric standards for SAR (sodium adsorption ratio) and salinity for the Tongue River, Powder River and Rosebud Creek.