The Raton Basin in southern Colorado and northern New Mexico is undergoing increased development of its coalbed-methane resources. Annual production of methane from coalbeds in the Raton Basin in Huerfano and Las Animas Counties, Colorado, increased from about 28,000,000 thousand cubic feet from 478 wells to about 80,000,000 thousand cubic feet from 1,543 wells, during 1999-2004. Annual ground-water withdrawals for coalbed-methane production increased from about 1.45 billion gallons from 480 wells to about 3.64 billion gallons from 1,568 wells, during 1999-2004. Where the coalbeds are deeply buried near the center of the Raton Basin, water pressure may be reduced as much as 250 to 300 pounds per square inch to produce the methane from the coalbeds, which is equivalent to a 577- to 692-foot lowering of water level. In 2001, the U.S. Geological Survey, in cooperation with the Colorado Water Conservation Board, began an evaluation of the potential effects of coalbed- methane production on the availability and sustainability of ground-water resources. In 2003, there were an estimated 1,370 water-supply wells in the Raton Basin in Colorado, and about 90 percent of these water-supply wells were less than 450 feet deep. The tops of the production (perforated) interval of 90 percent of the coalbed-methane wells in the Raton Basin (for which data were available) are deeper than about 675 feet. The potential for interference of coalbed-methane wells with nearby water-supply wells likely is limited because in most areas their respective production intervals are separated by more than a hundred to a few thousand feet of rock. The estimated vertical separation between production intervals of coalbed-methane and water-supply wells is less than 100 feet in an area about 1 to 6 miles west and southwest of Trinidad Lake and a few other isolated areas. It is assumed that in areas with less than 100 feet of vertical separation, production by coalbed-methane wells has a greater potential for interfering with nearby water-supply wells. More detailed geologic and hydrologic information is needed in these areas to quantify the potential effects of coalbed-methane production on water levels and the availability and sustainability of ground-water resources.