While coal is the biologically/chemically altered remains of plant life, oil is the remnant of marine animals. In another process that took millions of years to complete, sea creatures buried with mud and silt decomposed under temperature and pressure to produce organic deposits. In this case, the composition of the sea creatures differed from that of vegetation; and the breakdown produced smaller organic molecules that liquefied. Often, the liquefied molecules filtered through the rock formations to collect in pockets. These pockets are the sources of the "gushers" that American prospectors once found in the U.S., and which can still be found in other areas of the world. In other cases, the oil became trapped within the sediment and is not readily extractable. A classic example is a geologist setting a piece of shale on fire due to the minute droplets of oil contained within the rock.

Oil, more than any other natural resource, is a driving force in international politics. For the U.S. power industry, however, oil-fired generation accounts for a very small percentage of total energy production less than 3%. It once was higher, but the decline in U.S. oil reserves coupled with the volatility of supplies from the Middle East forced utilities to switch to alternate energy sources.

The number and type of petrochemicals that we have developed from oil are enormous. The classic examples are plastics. With regard to fuels, oil contains a wide number of various sized hydrocarbons, many of which can be separated by distillation.