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U.S. Department of the Interior Natural Resources Revenue Data wordmark with oil platform rig pulling up a dollar sign

How it works /

Fossil fuels

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Fossil fuels are our main source of electricity and the primary fuel for powering motor vehicles and heating homes. Fossil fuels are used to make many products. Through natural processes over hundreds of millions of years, plant and animal matter becomes energy resources in the form of oil, gas, and coal. While fossil fuels are abundant, they are not renewable. Explore production data.


Oil forms in underground reservoirs on land and under the ocean. Crude oil occurs naturally, while petroleum products (for example, jet fuel, diesel fuel, and heating oil) come from refining and otherwise processing crude oil and other liquids. Petroleum is a broad term that can mean both crude oil and petroleum products. In 2015, five states — Texas, North Dakota, California, Alaska, and Oklahoma — and federal submerged lands in the Gulf of Mexico supplied more than 81% of the crude oil produced here.


Gas, also called natural gas, forms underground on land and offshore in beds under the ocean. There are two types of natural gas: dry and wet. Dry natural gas is mostly methane. Wet natural gas contains a small amount of methane, as well as other liquid hydrocarbons — such as ethane, propane, and butane — and nonhydrocarbon gases. Wet natural gas is the source of natural gas liquids. Once wet natural gas is extracted from the ground, natural gas liquids are separated from the gas stream close to the well or at a gas processing plant. This leaves both dry gas and natural gas liquids such as ethane, propane, and butane.

The U.S. produces more gas than any other country in the world. In 2015, five states produced 65% of the total dry natural gas: Texas, Pennsylvania, Louisiana, Wyoming, and Oklahoma.

In conventional extraction, companies extract oil and gas by drilling a vertical well. At first, oil and gas rise to the surface of the well fueled by underground pressure. Once the pressure gives out, operators can inject gases or water from the initial drilling back into the formation to increase pressure and push additional resources to the surface, or install pumps to help provide artificial lift for oil production. Finally, operators can inject steam, gases, or other chemicals into the formation to change the oil’s composition so that it can more easily rise through the well.

Extraction methods for oil and gas changed significantly starting in the early 2000s, with the new applications of horizontal drilling and hydraulic fracturing, commonly known as fracking. Horizontal drilling creates lateral wells for oil and gas to flow through. Hydraulic fracturing pumps water, sand, and chemicals into the earth to fracture the shale rock so that natural gas and oil can flow through the cracks into the well and then to the surface. These methods made extracting oil and gas trapped in almost impermeable shale rock formations deep below the surface of the earth profitable for extractive industries.

In the past decade, these changing extraction methods and rising natural gas prices have made shale oil and gas increasingly attractive to extractive industries. Major oil and gas shale rock formations include the Permian, Haynesville, and Eagle Ford Regions mostly in Texas; the Marcellus Region in West Virginia, Pennsylvania, and New York; the Niobrara Region in Wyoming and Colorado; and the Bakken Region in North Dakota and Montana.

In addition to these shale formations, the Green River Formation, which is located at the intersection of Colorado, Utah, and Wyoming, is estimated to hold 1.44 trillion barrels of oil (PDF). In shale gas, two Appalachian plays have driven U.S. shale gas production, which accounts for 50% of total U.S. natural gas production. These plays are the Marcellus Play (spanning nine states from New York to Tennessee) and the Utica Play (spanning Ohio, West Virginia, Pennsylvania, and New York).

To see where oil and gas resources exist and where exploration is taking place, visit the following:


Coal forms in the ground in coal seams or beds. Miners extract coal through surface and subsurface mining. In surface mining, the coal is close to the surface. Miners remove the “overburden,” or the soil and rock covering the coal, before mining it. In subsurface mining, the coal is farther down in the earth. Through passages that go into the earth, miners remove the coal from underground rooms or long coal seams. In 2014, the U.S. was the world’s second largest coal producer after China.

Coal is concentrated in three regions: the Appalachian Region, the Interior Region, and the Western Region. In recent years, the Western Region — most of which is the Powder River Basin in Wyoming — produced more than half of U.S. coal. From 2014 to 2015, proved coal reserves decreased by 5.3% (PDF).

See where the U.S. gets its coal, or learn about coal reserves and their locations.

What are reserves?

There are three common types of reserves, or the amount of a particular natural resource available for extraction:

  • Proved reserves are the estimated volumes of a natural resource that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
  • Technically recoverable resources include natural resources that can be produced based on current technology, industry practices, and geological knowledge.
  • Economically recoverable resources are the portion of technically recoverable natural resources that can be profitably produced.