Why is coal so much cheaper than oil?



  1. 0 Votes

    Coal is much more plentiful world wide. Most countries world wide have a supply of coal, but very few countries have a stores of oil, let alone big stores. For example, the United States has both coal and oil, but drastically more coal than oil. It’s a good example of supply and demand, there is a lot more coal than oil, and oil tends to be in higher demand, so oil is more expensive.

  2. 0 Votes

    Coal is burned more or less in its natural state straight from the ground. No real processing, just transportation. It has one major use, burning to generate electricity. Oil has to be processed (refined) a lot to create usable products, of which there are many, from liquid fuels (more complicated to transport) for vehicles to feedstocks for synthetic rubber, paints, and plastics.

    Coal is easier to find and extract, and there is a lot of it still easy to produce. So much oil has been produced already that new discoveries can come only in difficult and expensive places, like the deepwater Gulf of Mexico.

    Also, oil is priced in a global marketplace, meaning that supply and demand almost anywhere can impact the price. Coal in the US is largely from, and used in, the US meaning its price depends only on domestic supply and demand, generally speaking, and is not especially sensitve to probelms in China, for example, whereas Chna’s burgeoning economy definitely impacts the price of oil as well as some other globalized commodities, like copper and lead.

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