All energy on Earth comes from the Sun, even the oil, gas and coal buried within the Earth is energy from the Sun.

Plants have existed on Earth for billions of years. Plants require three main inputs to grow: sunlight, water and CO2. Plants consume CO2 and excrete oxygen. In effect, plants are stored sun energy as well as the carbon from the CO2 they consumed while growing. Think about having a fire in your fireplace – the tree you burn is stored energy and carbon, both of which are released during the burning process.

When plants die they decay and their energy and carbon are released back into the biosphere. But, not all dead plants decay. A small portion – less than 1% – of dead biomass doesn’t go through the normal decay process. Instead, it sediments – meaning that it gets covered and included in forming rocks.

Over time (millions and billions of years), heat and pressure transform the biomass trapped in rock into a usable fuel. Oil is formed from slimy ocean plants while coal is formed from woody land plants. (Thus, finding oil found below land means that once that land was an ocean).

Thus, oil, gas and coal represent stored solar energy from dead plants. When burned, fossil fuels release their stored solar energy as well as stored carbon which combines with oxygen to form CO2. From the excellent book Storm in a Teacup: The Physics of Everyday Life:

Plants take in carbon dioxide to grow, and as the energy from their fuel is released, carbon dioxide is also re-formed and given back to the atmosphere. These individual gas molecules drift out into the air, changing how waves pass through the atmosphere. The consequence is that the planet overall becomes a slightly bigger reservoir for the Sun’s energy. After burning through the energy stores of millions of years, humans have heated the planet up slightly. Learning to deal with the new equilibrium state of our planet will take considerable ingenuity.