The Powder River Basin is a geologic structural basin in southeast Montana and northeast Wyoming, about 120 miles (190 km) east to west and 200 miles (320 km) north to south, known for its coal deposits. The region supplies about 40 percent of coal in the United States. It is both a topographic drainage and geologic structural basin. The basin is so named because it is drained by the Powder River, although it is also drained in part by the Cheyenne River, Tongue River, Bighorn River, Little Missouri River, Platte River, and their tributaries.
While the Powder River Basin is unified geologically, residents of areas distant from the Powder River proper do not think of themselves as living in a single geographic region. For example, residents of the Crow Reservation in the Big Horn River watershed, or of Sheridan in the Tongue River watershed, would locate the Powder River Basin as the region east of the Big Horn Mountains, using a definition based on watershed and topography.
Major cities in the area include Gillette and Sheridan, Wyoming and Miles City, Montana. Outside of these main towns, the area is very sparsely populated and is known for its rolling grasslands and semiarid climate. The former hunting grounds of the Oglala Lakota, it has become the single largest source of coal mined in the United States, and contains one of the largest deposits of coal in the world. Most of the active coal mining in the Powder River Basin actually takes place in drainages of the Cheyenne River. Because of the Powder River Basin, Wyoming has been the top coal-producing state in the United States since 1988. In 2007, the Powder River Basin alone produced 436 million short tons (396 million tonnes) of coal, more than twice the production of second-place West Virginia, and more than the entire Appalachian region. The Powder River Basin is the largest coal-producing region in the United States. The Black Thunder Coal Mine is one of the most productive coal mines in the United States; in 2006 this single mine produced 84 million metric tons of coal, more than any state except Wyoming, West Virginia, and Kentucky. The region is also a major producer of natural gas, both conventional natural gas and coal-bed methane.