A system for sequestering CO2 gas and releasing natural gas from underground coal and/or gas shale formations using CO2 gas captured from the flue gas of a coal burning power plant, and processing it to produce cold liquid pressurized CO2, and injecting the cold liquid CO2 under pressure to create fractures within the formation and causing the CO2 to be adsorbed into the coal or gas shale and CH4 to be desorbed, released and recovered. No high volume of water, no toxic additives to the water and no sand proppants are used for hydro-fracture of the gas shale or coal bed.