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How did the coal-bearing rocks form?

The numerous layers of coal beds in both of Kentucky's coal fields are intermixed with shale and sandstone (and rarely with thin limestones). Most of the major coal beds (there are about 45 to 50 in eastern Kentucky) were formed as widespread peat swamps or mires during the Pennsylvanian Period. During the Pennsylvanian Period the area that is now Kentucky was near the equator and had a climate much like that of modern Indonesia. Tropical climates allowed lush vegetation to accumulate into widespread peats.

the picture illustrates the rocks we see and the landscapes in which the rocks formed.

The alternation of coals with shales, sandstones, and thin limestones records alternating periods of sea-level changes. As sea level rose, swamps spread across Kentucky. Ultimately, the seas covered the swamps. Shallow seas covered parts of Kentucky more than 50 times during the Pennsylvanian. When sea level fell, the seas withdrew to the edges of the continent and large rivers snaked across Kentucky. In Kentucky, the peat swamps formed on extensive coastal plains. When sea level rose, the peat deposits were covered by muddy sediments. When sea level started to lower, coastal plains and small deltas built back over the muddy sea sediments. During the next low sea level, coastal peat (in swamps) was again deposited over the coastal plain sediments.
The peats, mud, and sand, buried by increasing layers of sediments, slowly became compacted. Eventually the peat transformed into coal and the grains in the muds and sands became cemented, transforming them into shales and sandstones. Remains of plants and animals buried by the sediments, were preserved and became fossils, if conditions were right. A variety of plant and animal fossils are found in the coal-bearing rocks in and around Kentucky.