A fossil fuel is a fuel formed by natural processes, such as anaerobic decomposition of buried dead organisms, containing organic molecules originating in ancient photosynthesis that release energy in combustion. Such organisms and their resulting fossil fuels typically have an age of millions of years, and sometimes more than 650 million years. Fossil fuels contain high percentages of carbon and include petroleum, coal, and natural gas. Commonly used derivatives of fossil fuels include kerosene and propane. Fossil fuels range from volatile materials with low carbon-to-hydrogen ratios (like methane), to liquids (like petroleum), to nonvolatile materials composed of almost pure carbon, like anthracite coal. Methane can be found in hydrocarbon fields alone, associated with oil, or in the form of methane clathrates.
As of 2018, the world's main primary energy sources consisted of petroleum (34%), coal (27%), and natural gas (24%), amounting to an 85% share for fossil fuels in primary energy consumption in the world. Non-fossil sources included nuclear (4.4%), hydroelectric (6.8%), and other renewables (4.0%, including geothermal, solar, tidal, wind, wood, and waste). The share of renewables (including traditional biomass) in the world's total final energy consumption was 18% in 2018.
Most air pollution deaths are due to fossil fuel combustion products: it is estimated that this pollution costs over 3% of global GDP, and that fossil fuel phase-out would save 3.6 million lives each year.
The use of fossil fuels causes serious environmental damage. The burning of fossil fuels produces around 35 billion tonnes (35 gigatonnes) of carbon dioxide (CO2) per year. Natural processes can only absorb a small part of that amount, so there is a net increase of many billion tonnes of atmospheric carbon dioxide per year. CO2 is a greenhouse gas that increases radiative forcing and contributes to global warming and ocean acidification. A global movement towards the generation of low-carbon sustainable energy is underway to help reduce global greenhouse gas emissions. But in 2019 fossil fuels were subsidized $320 billion.
The theory that fossil fuels formed from the fossilized remains of dead plants by exposure to heat and pressure in the Earth's crust over millions of years was first introduced by Andreas Libavius "in his 1597 Alchemia [Alchymia]" and later by Mikhail Lomonosov "as early as 1757 and certainly by 1763". The first use of the term "fossil fuel" occurs in the work of the German chemist Caspar Neumann, in English translation in 1759. The Oxford English Dictionary notes that in the phrase "fossil fuel" the adjective "fossil" means "[o]btained by digging; found buried in the earth", which dates to at least 1652, before the English noun "fossil" came to refer primarily to long-dead organisms in the early 18th century.
Aquatic phytoplankton and zooplankton that died and sedimented in large quantities under anoxic conditions millions of years ago began forming petroleum and natural gas as a result of anaerobic decomposition. Over geological time this organic matter, mixed with mud, became buried under further heavy layers of inorganic sediment. The resulting high temperature and pressure caused the organic matter to chemically alter, first into a waxy material known as kerogen, which is found in oil shales, and then with more heat into liquid and gaseous hydrocarbons in a process known as catagenesis. Despite these heat-driven transformations (which increase the energy density compared to typical organic matter by removal of oxygen atoms), the energy released in combustion is still photosynthetic in origin.
Terrestrial plants, on the other hand, tended to form coal and methane. Many of the coal fields date to the Carboniferous period of Earth's history. Terrestrial plants also form type III kerogen, a source of natural gas. Although fossil fuels are continually formed by natural processes, they are classified as non-renewable resources because they take millions of years to form and known viable reserves are being depleted much faster than new ones are generated.
There is a wide range of organic compounds in any given fuel. The specific mixture of hydrocarbons gives a fuel its characteristic properties, such as density, viscosity, boiling point, melting point, etc. Some fuels like natural gas, for instance, contain only very low boiling, gaseous components. Others such as gasoline or diesel contain much higher boiling components.
Fossil fuels are of great importance because they can be burned (oxidized to carbon dioxide and water), producing significant amounts of energy per unit mass. The use of coal as a fuel predates recorded history. Coal was used to run furnaces for the smelting of metal ore. While semi-solid hydrocarbons from seeps were also burned in ancient times, they were mostly used for waterproofing and embalming.
Heavy crude oil, which is much more viscous than conventional crude oil, and oil sands, where bitumen is found mixed with sand and clay, began to become more important as sources of fossil fuel in the early 2000s. Oil shale and similar materials are sedimentary rocks containing kerogen, a complex mixture of high-molecular weight organic compounds, which yield synthetic crude oil when heated (pyrolyzed). With additional processing, they can be employed instead of other established fossil fuels. More recently, there has been disinvestment from exploitation of such resources due to their high carbon cost relative to more easily processed reserves.
Prior to the latter half of the 18th century, windmills and watermills provided the energy needed for industry such as milling flour, sawing wood or pumping water, while burning wood or peat provided domestic heat. The wide-scale use of fossil fuels, coal at first and petroleum later, in steam engines enabled the Industrial Revolution. At the same time, gas lights using natural gas or coal gas were coming into wide use. The invention of the internal combustion engine and its use in automobiles and trucks greatly increased the demand for gasoline and diesel oil, both made from fossil fuels. Other forms of transportation, railways and aircraft, also require fossil fuels. The other major use for fossil fuels is in generating electricity and as feedstock for the petrochemical industry. Tar, a leftover of petroleum extraction, is used in construction of roads.
Levels of primary energy sources are the reserves in the ground. Flows are production of fossil fuels from these reserves. The most important primary energy sources are carbon-based fossil energy sources.
The use of fossil fuels was central to the industrial revolution and over the past few centuries has helped deliver huge improvements to the standard of living across the planet. Nevertheless, the burning of fossil fuels has a number of negative externalities - harmful environmental impacts where the effects extend beyond the people using the fuel. The actual effects depend on the fuel in question. All fossil fuels release when they burn, thus accelerating climate change. Burning coal, and to a lesser extent oil and its derivatives, contribute to atmospheric particulate matter, smog and to acid rain.
Climate change is largely driven by the release of greenhouse gasses like , with the burning of fossil fuels being the main source of these emissions. While climate change may have positive effects in some parts of the world, in other parts it is already negatively impacting ecosystems. This includes contributing to the extinction of species and reducing people's ability to produce food, thus adding to the problem of hunger. Continued rises in global temperatures will lead to further adverse effects on both ecosystems and people, with the World Health Organization having stated climate change is the greatest threat to human health in the 21st century.
Combustion of fossil fuels generates sulfuric and nitric acids, which fall to Earth as acid rain, impacting both natural areas and the built environment. Monuments and sculptures made from marble and limestone are particularly vulnerable, as the acids dissolve calcium carbonate.
Fossil fuels also contain radioactive materials, mainly uranium and thorium, which are released into the atmosphere. In 2000, about 12,000 tonnes of thorium and 5,000 tonnes of uranium were released worldwide from burning coal. It is estimated that during 1982, US coal burning released 155 times as much radioactivity into the atmosphere as the Three Mile Island accident.
In addition to effects that result from burning, the harvesting, processing, and distribution of fossil fuels also have environmental effects. Coal mining methods, particularly mountaintop removal and strip mining, have negative environmental impacts, and offshore oil drilling poses a hazard to aquatic organisms. Fossil fuel wells can contribute to methane release via fugitive gas emissions. Oil refineries also have negative environmental impacts, including air and water pollution. Transportation of coal requires the use of diesel-powered locomotives, while crude oil is typically transported by tanker ships, requiring the combustion of additional fossil fuels.
A variety of mitigating efforts have arisen to counter the negative effects of fossil fuels. This includes a movement to use alternative energy sources, such as renewable energy. Environmental regulation uses a variety of approaches to limit these emissions, for example, rules against releasing waste products like fly ash into the atmosphere. Other efforts include economic incentives, such as increased taxes for fossil fuels, and subsidies for alternative energy technologies like solar panels.
In December 2020, the United Nations released a report saying that despite the need to reduce greenhouse emissions, various governments are "doubling down" on fossil fuels, in some cases diverting over 50% of their Covid-19 recovery stimulus funding to fossil fuel production rather than to alternative energy. The UN secretary general António Guterres declared that "Humanity is waging war on nature. This is suicidal. Nature always strikes back - and it is already doing so with growing force and fury." Guterres also said there is still cause for hope, anticipating Joe Biden's plan for the US to join other large emitters like China and the E.U. in adopting targets to reach net zero emissions by 2050. 
Environmental pollution from fossil fuels impacts humans because particulates and other air pollution from fossil fuel combustion cause illness and death when inhaled. These health effects include premature death, acute respiratory illness, aggravated asthma, chronic bronchitis and decreased lung function. The poor, undernourished, very young and very old, and people with preexisting respiratory disease and other ill health, are more at risk. Total global air pollution deaths reach 7 million annually.
While all energy sources have inherently adverse effects, the data shows that fossil fuels cause the highest levels of greenhouse gas emissions and are the most dangerous for human health. In contrast, modern renewable energy sources appear to be safer for human health and cleaner. The death rate from accidents and air pollution in the EU are as follows per terawatt-hour: coal (24.6 deaths), oil (18.4 deaths), natural gas (2.8 deaths), biomass (4.6 deaths), hydropower (0.02 deaths), nuclear energy (0.07 deaths), wind (0.04 deaths), and solar (0.02 deaths). The greenhouse gas emissions from each energy source are as followed measured in tonnes: coal (820 tonnes), oil (720 tonnes), natural gas (490 tonnes), biomass (78-230 tonnes), hydropower (34 tonnes), nuclear energy (3 tonnes), wind (4 tonnes), and solar (5 tonnes). As the data shows, coal, oil, natural gas, and biomass cause higher death rates and higher levels of greenhouse gas emissions than hydropower, nuclear energy, wind, and solar power. Scientists propose that 1.8 million lives have been saved by replacing fossil fuel sources with nuclear power.
This section needs to be updated.(April 2020)
In 2014, there were 1,469 oil and gas firms listed on stock exchanges around the world, with a combined market capitalization of US$4.65 trillion. In 2019, Saudi Aramco was listed and it touched a US$2 trillion valuation on its second day of trading, after the world's largest initial public offering.
Air pollution from fossil fuels in 2018 has been estimated to cost US$2.9 trillion, or 3.3% of global GDP.
A 2015 report studied 20 fossil fuel companies and found that, while highly profitable, the hidden economic cost to society was also large. The report spans the period 2008-2012 and notes that: "For all companies and all years, the economic cost to society of their emissions was greater than their after-tax profit, with the single exception of ExxonMobil in 2008.":4 Pure coal companies fare even worse: "the economic cost to society exceeds total revenue in all years, with this cost varying between nearly $2 and nearly $9 per $1 of revenue.":5 In this case, total revenue includes "employment, taxes, supply purchases, and indirect employment.":4
Fossil fuel prices generally are below their actual costs, or their "efficient prices," when economic externalities, such as the costs of air pollution and global climate destruction, are taken into account. Fossil fuels are subsidized in the amount of $4.7 trillion in 2015, which is equivalent to 6.3% of the 2015 global GDP and are estimated to grow to $5.2 trillion in 2017, which is equivalent to 6.5% of global GDP. The largest five subsidizers in 2015 were the following: China with $1.4 trillion in fossil fuel subsidies, the United States with $649 billion, Russia with $551 billion, the European Union with $289 billion, and India with $209 billion. Had there been no subsidies for fossil fuels, global carbon emissions would have been lowered by an estimated 28% in 2015, air-pollution-related deaths reduced by 46%, and government revenue increased by $2.8 trillion or 3.8% of GDP.
United States government subsidies include financing provided by the US Export-Import Bank (USEIB), an agency of the U.S. federal government, for overseas projects by large petrochemical corporations. During the administration of U.S. President Obama, USEIB provided close to $34 billion to finance 70 fossil fuel projects around the world, including in Queensland, Australia, Mpumalanga, South Africa, and Madhya Pradesh, India.'
A major effect of state subsidy for petrochemical production has been increased extraction, including increased investment into new wells. Estimated at an oil price of $50 per barrel, tax preferences and other U.S. government subsidies have rendered profitable close to half of investment in new oil production. This U.S. government subsidy is estimated to drive an increase in American oil production of 17 billion barrels over the next few decades. This increase in oil use is equivalent to 6 billion tons of carbon dioxide, and comprises as much as 20% of US oil production through 2050, assuming an overall carbon budget that limits average global warming to 2 °C.
There are 1,469 oil and gas firms listed on stock exchanges around the world, worth a combined $4.65 trillion.