The underground gasification of coal and lignite is of interest when traditional coal extraction is impossible or unprofitable and also with increasing demand for thermal and/or electric power. In the Soviet Union, at six industrial Podzemgaz stations, beginning in the 1930s, more than 15 million t of coal was processed to obtain more than 50 billion m3 of gas. The South Abinsk station operated from 1955 to 1996, while the Angren station has been operating since 1963. Research on the underground gasification of coal has been largely theoretical, without close connection to industrial practice, and the results are based on mathematical modeling and data from 50–70 years ago. Obviously, Russia’s leading position in the underground gasification of coal has been lost. Russia now lags a number of countries that are making significant investments in the process. Note that, in Russia, despite the obvious benefits of underground gasification of coal, interest in the process has waned, on account of its significant deficiencies: the possibility of gas filtration to the surface; insufficient controllability of coal-bed preparation and thermal processing; the relatively low heat of combustion of the gas produced; and considerable losses of gas and coal underground. Note also the environmental impact of the underground gasification of coal, associated with the deformation of rock, its thermal, chemical, and hydrogeological changes, increase in its temperature, and active chemical pollution of groundwater. An obstacle to the adoption of the underground gasification of coal is the lack of clear ideas regarding the preparation and use of fuel gas. Recommendations for improving the process focus on the design of the underground gas generator and the gasification of the coal bed, without addressing the technology of the underground system, whose cost accounts for ~75% of the total equipment costs. The method proposed in the present work for the preparation of fuel gas from coal challenges the notion that the gas produced in underground gasification of coal should be divided into two products: gas and the tar (hydrocarbons) that forms in the preparation of the gas for combustion. If the specified temperatures are maintained, no condensation of hydrocarbons in the equipment and gas lines is observed, and dry dust removal from the gas may be employed, without complex processing of wastewater and of explosive and toxic materials. That significantly improves the economic and environmental characteristics of the process, Analysis of the results shows that the proposed approach to purifying the fuel gas produced by underground gasification of coal and lignite reduces capital costs in construction of the system by almost half; and the costs of gas production by a factor of 1.7. The time to recoup the initial investment is shortened by 41%; the yield of thermal energy is increased by 10.5%; and annual power output is increased by 151296 MW-h.