Abstract: The coal bed methane reservoir is typically sensitive to stress, which is quite different from conventional gas reservoir with natural fractures.During the primary period of production, the permeability shows declining trend with the increment of effective stress.However, the matrix shrinkage could result in increasing permeability with the continuous desorption of coal bed gas from the matrix, which brings forward the importance to increase desorption area as much as possible to improve gas productivity.If the discharge rate of water from cleats is too large and excessive effective stress is exerted on cleats near wellbore, the closure of cleats will result in short drainage radius, therefore low gas production rate.The relationship of permeability and effective stress was established from the desorption and seepage experiments of actual cores.With the ECLIPSE E300 three dimensional two porosity compositional simulator, the reasonable discharge rate is discussed by means of simulation, and the results can be used as reference for actual production.