When people talk about fossil fuels they are referring to the three main energy sources Earth produces: coal, natural gas, and petroleum (otherwise known as crude oil). According to the Department of Labor these three forms of fuel combined provide 85 percent of America's energy. Coal is mostly carbon, while petroleum and natural gas are known as hydrocarbons (molecules of hydrogen and carbon combined) and occur naturally in a liquid or gaseous state.
During the carboniferous period about 300 million years ago, lush swamps and jungles covered the Earth, and algae (made up of microscopic plants called diatoms) filled the ocean. Dead plant material and algae sank to the sea floor and accumulated in layers of peat. As more debris piled on top of this layer of peat, millions of years of heat and pressure broke down the molecules into their basic components: carbon and hydrogen. Which fuel you wind up with depends on how this process occurred.
Compressed peat shielded from water and debris by sediment forms coal, which comes in different sub-varieties depending on how much carbon is present; the more carbon, the more cleanly coal will produce energy. Petroleum and natural gas were created in much the same way, but they were not fully dehydrated and instead formed pockets in porous rocks deep underground.
Each type of fossil fuel can be found in nearly every continent on the globe, but some continents have much more than others. For example, the Middle East has the largest deposits of crude oil on the planet; natural gas tends to be found alongside deposits of crude oil, though not necessarily in comparable quantities. Coal is abundant and can be found in every continent.
A big advantage to fossil fuels is their ease of use. Coal is quite abundant, and once it is broken down it is easily combustible. Natural gas and oil can be very efficiently transported through pipelines, allowing them to provide energy to otherwise remote areas of the world.
Although fossil fuels can be readily transported, their use takes a great toll on the environment. Coal-fired power plants create lots of carbon- and sulfur-dioxide, both greenhouse gases that contribute to global climate change. In addition fossil fuels are finite resources, and when they are depleted they're gone for good.