Coal

Coal is a sedimentary rock composed primarily of carbon, hydrogen, and oxygen. Coal is a fossil fuel formed from ancient plants buried deep in the Earth’s crust over 300 million years ago. Historians believe coal was first used commercially in China for smelting copper and for casting coins around 1,000 BC. Almost 92% of all coal consumed in the US is burned by electric power plants, and coal accounts for about 55% of total electricity output. Coal is also used in the manufacture of steel. The steel industry first converts coal into coke, then combines the coke with iron ore and limestone, and finally heats the mixture to produce iron. Other industries use coal to make fertilizers, solvents, medicine, pesticides, and synthetic fuels.

There are four types of mined coal: anthracite (used in high-grade steel production), bituminous (used for electricity generation and for making coke), sub-bituminous, and lignite (both used primarily for electricity generation).

Coal futures trade at the New York Mercantile Exchange (NYMEX). The contract trades in units of 1,550 tons and is priced in terms of dollars and cents per ton.

Supply – US production of bituminous coal in 2003 fell slightly to 1.07 billion tons from 1.09 billion tons in 2002. Wyoming is the largest producer of coal in the US with 34% of the total, followed by West Virginia (14%), and Kentucky (11%).

Demand – US consumption of coal in 2002 rose slightly to 1.07 billion tons.

Trade – US exports of coal in 2002 totaled 39.6 million tons, accounting for about 4% of US production. The key exporting destinations for the US are Canada and Europe.