Coal can act as a source rock for the generation f liquid hydrocarbons. The production of liquid hydrocarbons from coal is similar to that of type III kerogen, reflecting the origin of the organic matter in coal and type III kerogen, primarily from hydrogen -poor (lipid-poor) and oxygen rock vascular plants.

Type III kerogen plot at the high end of the O/C ratio in Van Krevelen plots.
World wide, most petroleum source rocks and petroleum deposits are derived from type I and II kerogens. The organic matter in these rocks and petroleum deposits are derived from type I and II kerogens. The organic matter in these rocks are derived from more lipid rich algae.
- In some cases, coal beds may produce commercial petroleum fields, and a number of oil accumulations worldwide are believed to be derived primarily from coal.
- The element composition of coal is a key factor in determining it’s oil generating potential. Generally coals are considered oil-prone if their atomic H/C values is 0.8 or higher, corresponding to a hydrogen index (HI) value of >200 in Rock-Eval analysis.
- Coals with abundant liptinite (15-25% relative abundance) and liptinite bands expel liquid hydrocarbons most efficiently.
- Coals containing a significant proportion of microbial remains (so called per-hydrous coals) also generate more liquid hydrocarbons than average coals.
Petroleum generation during coalification
The initiation of the petroleum-forming potential of coals begins during peatification, when extractable hydrocarbons increases due to the microbial degradation and the transformation of biopolymers in peat. This process continues during the early stages of coalification.
- The primary liquid hydrocarbon-generating phase for coal (oil window) typically occurs between the subbituminous and the low-volatile bituminous coal rank (vitrinite reflectance Ro range of 0.5-1.6%).
- The Rock-Eval pyrolysis, which examines the volatiles emitted from organic matter in order to estimate the hydrocarbon-generating potential of coal sediments, suggests that coals do not generate significant amounts of hydrocarbon before they reach the high volatile A bituminous rank, and that a significant generative potential remains even in higher rank, medium-volatile bituminous coals.
Trapping of hydrocarbons generated from coal
Liquid hydrocarbons apparently are continuously generated and expelled from coal. Nevertheless, residual quantities of liquid hydrocarbons are normally trapped within the coal macromolecular matrix. These trapped liquid hydrocarbons are probably converted to gas during continued coalification.
Qualities of hydrocarbon generated from coal
- Liquid hydrocarbons derived from coal have distinctive composition that distinguishes them from oils derived from algal-dominated type I and II rource rocks.
- Petroleum derived from coal tends to have high pristane/ phytane ratios : a ratio >4 is considered as diagnostic of a coal source.
- Petroleum derived from coal also tends to have a dominance of odd-carbon-number n-alkanes (CPI : Carbon Performance Index > 1), reflecting odd-carbon-number dominance in waxes from higher plants.
- Polycyclic aromatic structures, especially substituted naphthalene and phenanthrenes, are also more abundant in coal-derived petroleum compared to algal-driven petroleum.