Quick answer
Kentucky's Constitution addresses deeds and other instruments that sever the surface and mineral estates, grant a mineral estate, or grant a right to extract minerals.[6] Coal rights can also be divided by seam: in one West Virginia case, the leases covered all the coal in all seams above a named seam on the leased tracts.[7]
Coal is classified into four main ranks: anthracite, bituminous, subbituminous and lignite.[2] Anthracite generally has the highest heating value of the ranks, and all U.S. anthracite mines are in northeastern Pennsylvania.[2] Bituminous coal is the most abundant rank found in the United States, and lignite has the lowest energy content.[2]
U.S. coal is mainly found in three regions: the Appalachian coal region, the Interior coal region and the Western coal region, which includes the Powder River Basin.[1]
The Appalachian coal region includes Alabama, eastern Kentucky, Maryland, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia, and underground mines supply most of its coal.[1]
West Virginia is the top coal-producing state in the Appalachian region and the second-highest producer in the United States.[1]
The Interior coal region includes Illinois, Indiana and western Kentucky among other states, and Illinois is its top producer.[1]
The Western coal region includes Wyoming, Montana, North Dakota, Colorado and other states, and surface mines produce most of its coal.[1]
Wyoming is the top coal-producing state, and the two largest U.S. coal mines, Black Thunder and North Antelope Rochelle, are both in Wyoming.[1]
The top bituminous coal producers in 2022 were West Virginia, Illinois, Pennsylvania, Kentucky and Indiana.[2]
Subbituminous coal came mostly from Wyoming, followed by Montana, New Mexico, Colorado and Alaska.[2]
Lignite was produced in five states in 2022, led by North Dakota and Texas, with smaller amounts from Mississippi, Louisiana and Montana.[2]
The coal leases in a 2020 West Virginia Supreme Court of Appeals decision carried a tonnage royalty, a minimum annual royalty and a fixed term of years.[7] The tonnage royalty in those leases was expressed as a percentage.[7] Those leases were recorded in the county deed books by book and page.[7] The same property was later covered by a top lease, a lease made effective subject to earlier leases on the same land.[7] The parties in that case negotiated over lowering the tonnage royalty, dropping the minimum annual royalty and lengthening the lease term, which shows that each of those terms is set by the lease contract.[7]
For federal coal, the Bureau of Land Management administers a leasing program under the Mineral Leasing Act of 1920, holds lease sales and tracks production so that lessees pay the right royalties.[8] Federal coal leases require an annual rental and a royalty on produced coal, which the Bureau describes as a share of the gross value of the coal produced.[9] A federal coal lease must produce commercial quantities of coal within 10 years of issuance, and failing that diligent development requirement results in termination of the lease.[10] On application, the Bureau can temporarily reduce a federal lease royalty rate for a specific area of coal when the reduction encourages the greatest ultimate recovery of the coal.[9]
The Surface Mining Control and Reclamation Act of 1977 regulates coal mining and requires that mined land be adequately reclaimed during and after mining.[11] A state with an approved regulatory program becomes the primary regulator of coal mining and handles permitting, inspection and enforcement, while the federal Office of Surface Mining Reclamation and Enforcement provides oversight.[11] On lands containing leased federal coal, no surface coal mining may begin until the Secretary of the Interior approves the mining plan.[12]
Under Kentucky's Constitution, a severance instrument that does not state the method of coal extraction is read, absent clear and convincing evidence otherwise, to allow only the methods commonly in use in the area when it was signed.[6] Pennsylvania's Bituminous Mine Subsidence and Land Conservation Act requires an underground mine operator who affects a public or private water supply to restore or replace it.[13] Surface mining is often used when coal is less than 200 feet underground, and underground mining is used when coal lies deeper.[3]
Coal prices are generally higher for coal with a high heat content, and rank reflects the carbon and heat content of the coal.[4]
Low-sulfur coal may sell for higher prices than high-sulfur coal because environmental regulations limit sulfur emissions.[4]
Where coal beds are thick and near the surface, as in Wyoming, mining costs and coal prices tend to be lower than where beds are thinner and deeper, as in Appalachia.[4]
Transportation adds to the delivered price of coal, and on long shipments of Wyoming coal to eastern power plants it can exceed the price of the coal at the mine.[4]
Coking coal, also called metallurgical coal, is used to make steel and must be low in sulfur, which makes it more expensive than coal used in power plants.[4]
Most coal sold for electric power generation is sold through long-term contracts, which tend to be more stable than spot prices.[4]
The electric power sector has accounted for the majority of U.S. coal consumption since 1961.[5]
What Buckhead buys depends on the deal, and Buckhead tells the seller up front which interest it is offering to buy — for example, the payments for the rest of the current lease term, a term easement, or a longer-term interest. Kentucky's Constitution distinguishes instruments that sever the surface and mineral estates, instruments that grant a mineral estate, and instruments that grant a right to extract minerals.[6] A coal lease runs for a set term: the leases in the West Virginia case had a term of years, and the parties discussed extending it from five years to twenty.[7] In that case the owners leased their coal rather than conveying it, and the leases provided for a tonnage royalty and a minimum annual royalty due to the owners.[7]
Buckhead Energy buys coal mineral rights and coal royalties. Recorded documents describe what a coal owner holds: in the West Virginia case, each coal lease was identified by its county deed book and page and described the seams and tracts it covered.[7] Where coal is leased from the federal government, the Bureau of Land Management inspects leases and mining operations at least quarterly to check that royalty is paid on all the coal mined.[9]
Alabama (14,382,365 short tons in 2024)
Alaska (1,003,565 short tons in 2024)
Colorado (12,391,325 short tons in 2024)
Illinois (34,230,307 short tons in 2024)
Indiana (20,147,124 short tons in 2024)
Kentucky (24,308,599 short tons in 2024)
Louisiana (264,374 short tons in 2024)
Maryland (1,320,929 short tons in 2024)
Mississippi (2,041,402 short tons in 2024)
Missouri (147,314 short tons in 2024)
Montana (26,983,458 short tons in 2024)
New Mexico (7,198,771 short tons in 2024)
North Dakota (25,414,668 short tons in 2024)
Ohio (1,795,099 short tons in 2024)
Oklahoma (118 short tons in 2024)
Pennsylvania (40,596,563 short tons in 2024)
Texas (12,296,514 short tons in 2024)
Utah (7,419,699 short tons in 2024)
Virginia (9,749,858 short tons in 2024)
West Virginia (79,532,981 short tons in 2024)
Wyoming (190,730,914 short tons in 2024)
Powder River Basin Mineral Rights
Educational information only — not legal, tax, or investment advice. Consult a qualified attorney, CPA, or landman about your specific situation.
The coal can belong to someone other than the surface owner, because deeds and other instruments can sever the surface and mineral estates.[6] In one West Virginia case, the coal leases were recorded in the county deed books by book and page.[7]
A private coal lease sets its own terms; the leases in a 2020 West Virginia decision provided for a tonnage royalty, expressed as a percentage, and a minimum annual royalty.[7] On federal coal leases, the lessee pays an annual rental and a royalty on produced coal based on the gross value of the coal.[9]
Section 19 of Kentucky's Constitution, as amended in 1988, provides that an instrument that does not describe the method of coal extraction is read to allow only the methods commonly in use in the area when it was signed, absent clear and convincing evidence otherwise.[6] The same rule applies where the instrument subordinates the surface estate to the mineral estate.[6]
In 2022, the five largest coal-producing states were Wyoming, West Virginia, Pennsylvania, Illinois and Kentucky.[1] Seven of the ten largest U.S. coal mines were in Wyoming, and all of those mines are surface mines.[1]
Surface mining is often used for coal less than 200 feet underground and underground mining for deeper coal.[3] Coal prices at surface mines are generally lower than at underground mines, which reflect more difficult mining conditions.[4]
Coal can be leased before it is mined: in the West Virginia case, coal leases signed in 2012 came before the lessee began seeking mining permits for the property in 2014.[7] Those leases also carried a minimum annual royalty alongside the tonnage royalty.[7]
Buckhead Energy buys coal mineral rights and coal royalties.
[1] Coal explained: Where our coal comes from — U.S. Energy Information Administration (accessed November 1, 2026)
[2] Coal explained — U.S. Energy Information Administration (accessed November 1, 2026)
[3] Coal explained: Coal mining and transportation — U.S. Energy Information Administration (accessed November 1, 2026)
[4] Coal explained: Coal prices and outlook — U.S. Energy Information Administration (accessed November 1, 2026)
[5] Coal explained: Use of coal — U.S. Energy Information Administration (accessed November 1, 2026)
[6] Constitution of Kentucky, Section 19 — Kentucky General Assembly, Legislative Research Commission (accessed November 1, 2026)
[7] Iaeger Energy Development, LLC v. Moore, No. 18-0409 (memorandum decision, Jan. 13, 2020) — Supreme Court of Appeals of West Virginia (accessed November 3, 2026)
[8] Coal — U.S. Bureau of Land Management (accessed November 1, 2026)
[9] Coal: Lease Management — U.S. Bureau of Land Management (accessed November 1, 2026)
[10] Coal: Lease by Application Process — U.S. Bureau of Land Management (accessed November 1, 2026)
[11] Regulating Active Coal Mines — Office of Surface Mining Reclamation and Enforcement (accessed November 1, 2026)
[12] Regulating Active Coal Mines: Federal Lands — Office of Surface Mining Reclamation and Enforcement (accessed November 1, 2026)
[13] Surface Owner Rights and Responsibilities Summary: Bituminous Mine Subsidence and Land Conservation Act — Pennsylvania Department of Environmental Protection (accessed November 1, 2026)
Buckhead Energy buys coal mineral rights and coal royalties.
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