This dissertation presents contributions to the understanding of the dynamic nature of permeability of Indonesian coal. It is the first-of-its-kind study, first presenting a comparison of experimental results with those obtained using existing analytical permeability models, and then modifying the existing anisotropic model for application to the unique physical structure of Indonesian coal. The first problem addressed in this dissertation was establishing the pressure-dependentpermeability of coal in a laboratory environment replicating in situ conditions for two coal types from the Sanga Sanga basin of Kalimantan, Indonesia. The change in permeability with depletion and the corresponding volumetric strain of coal were measured in the laboratory under uniaxial strain condition (zero lateral strain). Two gases, helium and methane, were used as the flowing fluids during experimental work. The results showed that, decreasing pore pressure resulted in significant decrease in horizontal stress and increased permeability. The permeability increase at low reservoir pressure was significant, a positive finding for Indonesian coals. Using the measured volumetric changes with variations in pressure, the cleat compressibility for the two coal types was estimated. In a separate effort, volumetric strain as a result of desorption of gases was measured using sister samples under unconstrained condition, in absence of the stress effect. Sorptioninduced strain processes were modeled using the Langmuir-type model to acquire the two important shrinkage parameters. All parameters calculated using the experimental data were used for the modeling exercise. The second component of this dissertation is the permeability variation modeling to enable projecting long-term gas production in the Sanga Sanga basin. For this, two commonly used isotropic permeability models were selected. These models, developed primarily for the San Juan coal, were unable to match the measured permeability data. This was believed to be due to the inappropriate geometry used to represent Indonesian coal, where butt cleats are believed to be absent. This was followed by application of the most recent model, incorporating partial anisotropy in coal. This consideration improved the modeling results although there clearly was room for improvement. The final challenge addressed in this dissertation was to consider the coal geometry appropriate for Indonesian coal, stack of sheets as opposed to a bundle of matchsticks. In order to incorporate the structural anisotropy for the stack of sheets geometry, two input parameters were modified, based on geo-mechanical anisotropy. After applying these to the modified model, the permeability modeling results were compared with the experimental data. The matches improved significantly. Finally, the effect of maximum horizontal stress on permeability of coal was estimated by using high and low maximum horizontal stress values and constant vertical and minimum horizontal stresses. The effect of maximum horizontal stress on permeability was found to be significant under uniaxial strain condition for both coals.