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If I turn the optimizer to coal, it burns coal.
So as far as I have tested it's working as intended if you have enough to support all your needs. Otherwise it will mix, and that means Oil if you have it followed by coal if you dont or still need more coal after oil is taken into consideration.
Further: at some point I WILL have to begin extracting oil, and when I do I'll see if oil gets prioritized or used up even with my current 100% geothermal city running at peak capacity.
I have a feeling the momemt oil enters into thr equation, the engine just always uses it to SOME degree because the game has been programmed with oil as the MOST efficient source of heat at a 1:1 ratio without research being factored in.
that said, the generator burning oil will not impede your desires to turn oil into plastic. if you hover over materials, have you noticed that black bit before? that black bit is the "required by other buildings" group. so if you have industrial districts, they will get materials before all of your other buildings will. that way not having enough materials to prevent squalor will not impede your ability to make squalor-themed goods. or prefabs. it's the same with oil. if you make an oil->material fabricator inside your industrial districts, some of that oil will be reserved for the fabricator. this will, of course, reduce the amount of oil that gets burned in the generator, and thus increases the amount of fuel you need to heat everything else, but if you're wanting to use coal or geothermal in it anyway, this shouldn't be a problem.
EDIT: wait, adaptive pumps T2 is bugged to not prefer your chosen fuel over oil? oops. should be patched eventually. sorry for the misinformation on that, then.
Yeah I am probably going to have a save state of my above mentioned game PRE oil beinh introduced to my generator and POST oil. Just to see what that does interaction wise while prioritizing more than enough steam to run everything. I think my 2 steam vents are operating at 800 something fuel being provided for heat and it's not even touching coal yet.
Something seemed off there. Like, why give the options if none actually appear to work. And i had just dropped the a massive amount of cores on upgrading to the last tier hoping for more efficiency and was pretty disappointed. its boosts output in industrial areas and crops, but doesn't have a noticeable impact on efficiency.
Its just rolled out, there are gonna be bugs and things that need to be rebalanced.
Which is why I don't get Generator Upgrade III because it just burns FUEL and refuses everything else.