Fossil fuels are so named because their sources are not readily renewed like solar, wind or hydroelectric energy. There's only so much in the ground, and while new technologies find more of these resources, no one knows for sure how long the supplies will last. Burning fossil fuels brings environmental consequences ranging from air and water pollution to releasing carbon into the atmosphere. The availability and prices of fossil fuels are major factors influencing economic trends.
The Many Shades of Coal
Originating as decaying plant material that is buried by sediments, coal goes through several phases of development. First is lignite, or brown coal, the lowest grade. The Lignite Energy Council describes it as found near the surface, so it's mined by open-pit methods. Bituminous coal is harder and darker, and it contains more energy. Anthracite is the hardest and highest grade of coal, but it's also the most difficult to extract because it occurs deeper in the Earth's surface. The Union of Concerned Scientists lists several pollutants coming from coal, including sulfur dioxide and mercury. The risks of nuclear power are leading Germany to rely increasingly on coal, and German law allows the destruction of whole towns to mine the coal under them.
Oil-Fueled Economic Forces
With a higher energy density by weight than coal, oil and its derivatives like gasoline are the fuels of choice for transportation. Its importance in this role led to its use as a political weapon in the Arab Oil Embargo of 1973, which in turn motivated changes in U.S. energy policies. The American Petroleum Institute lists the industry's stance on many of these policies and issues. The price of oil remains volatile, as shown in a NASDAQ chart looking back 10 years. Controversy swirls around speculation of how much oil remains to be discovered and extracted around the world.
Clean-Burning Natural Gas
Natural gas is the cleanest-burning fossil fuel. This makes it an attractive alternative to coal or oil for applications ranging from generating electricity to powering vehicles. The increasing use of hydraulic fracturing and horizontal drilling methods have increased the available supply, but the Environmental Protection Agency enumerates a long list of issues related to the method, many of them relating to water. The increased supply of gas changes market forces, but the availability of future supplies is unclear, as described by the journal Nature.
The energy extraction industry has a history of cycles. In the 1880s, the gas boom in northern Ohio and Indiana provided cheap energy and jobs, but because the resource was thought to be inexhaustible it was squandered, and the boom lasted only a few years. Later booms came and went in Louisiana, Oklahoma and Texas. Markets for alternative energy sources like wind and solar power also ride these trends, as their profitability varies with the changing prices for fossil fuels.