Energy first

[bundyaxl]

If we're talking transport expansion, I think we need to talk energy business.

For one, electricity for buildings (produced using coal or oil without adding new resources, possibly solar and wind as well). Electricity could also be used for trains.

But mainly gasoline/diesel produced from oil. Also giving oil much more use, should be one of the biggest businesses in the game, 3 oil companies are on the Forbes top 10 leading companies and a few years ago they were in the top 5. (The rest seems to be dominated by banking)

This would be one of the main constant expenses of running a logistics company. Do you drill oil and produce fuel or buy it?

Then we could get into production of vehicles. Introduce a new product "semi-truck". Do you make your own trucks, or buy them?

[counting]

I used to think about the same thing.

A long time ago, when I tried to figure out if I can survive solely on producing natural resources as a pure mining company At first I though oil business should be as lucrative as in real world, but trust me this bankrupts you very quickly. And the expensive cost to build oil well hardly ever repays (and I never figure out what "consumption of reserve" is and why it's such a high cost).

[greene345]

Being an Energy Company, we'd need to create some plans that actually "make sense." For example, the HQ would look very different from the normal HQ. (See my suggestion about tailored HQ). I envision we'd need to either have a Chief of Engineering or have the CTO become more like the COO. We'd also need a Chief of Public Relations, and maybe a Chief Lobbying Officer (and set spending budget).

[counting]

Consider this issue in accounting perspective, money paid always goes somewhere. Freight cost goes to transportation department, advertising goes to media, and the overhead expense should go to "Energy department" and "Real state department" of the economy.

Since overhead cost usually consists mostly rent and electricity/water/gas bill, so it make sense that this huge sum of money contribute to some companies' revenue. The energy revenue is so huge, usually they are run by state-owned businesses.

Hence I think if this idea ever been made into the game, they should start as special department buildings like media firms with it's own unique options and layouts. An energy department buildings may "buy" resources as expense and "sell" utilities like electricity. Or we can have new class of products like gasoline, to commercial utility tools like power-supply module, generators, or solar/wind panels. And they can be sold to locals as household/small business usages, or to other companies counted as their overhead expense. (And we can have local/city-owned energy suppliers that provide default services, and the overhead expense can become a functional part of the economy, not just some fixed number)

[therealevan]

I used to think about the same thing.

A long time ago, when I tried to figure out if I can survive solely on producing natural resources as a pure mining company At first I though oil business should be as lucrative as in real world, but trust me this bankrupts you very quickly. And the expensive cost to build oil well hardly ever repays (and I never figure out what "consumption of reserve" is and why it's such a high cost).

It does work, please see my journal here:

http://www.capitalismfans.com/businessj ... ee/GR.html

The catch is to let the A.I grow so a supply/demand is established, I usually wait 10-15 years before I start into the natural resources. Make sure you turn off inflation, otherwise you'll be paying 1.5B for a mine that only delivers 100M in revenue.

[counting]

Thanks for the sharing of your journal.

I do know mining company works. It's "mining company"(or more precisely "resource firms") started as "oiling company" (usually oil well is so expensive, it's the only thing you could afford). First time I tried it years ago, it didn't work well for me from the start. I don't think pure oil company even works at current release. Even if you wait for years for ecosystem to set up. The demand for oil is simply too low for start-ups. Even in my empire of integration industries, oil wells still have very low profit margin. (unlike my chemical, iron, coal, they are the top mines and run out quick, silica, gold, silver, aluminum not so much)

However in real world, its such an easy money, with such demand, oil companies not just rank top in revenues (Exxon Mobil, Shell), they can even finance entire country (Saudi Arabian). Which doesn't reflect in the game at all, due to the lack of energy sector, which is the main topic here.

[therealevan]

It's definitely tricky to start a natural resource firm, especially if you don't wait for the game to establish supply/demand. Hopefully there will be options for adjusting starting supply/demand levels in future patches

[counting]

Out of curiosity, I tried to test exactly how to make oil business working (I have much confidence with my business sense than a decade ago). I was surprised that I actually did make a profitable oil business. Although it still can not compare with real life oil giants. Even 2 oil wells can only generate about 200 million revenue, and expect annual profit about 120 million.

It took almost all the AIs on 7 cities as clients (need nearly 2 oil wells to fully satisfy their need), and the end result gives ROI about 62% (took 3.5 years to run out). All in all not a bad business if you have monopoly on oil. You need to prepare about 160 million for each oil well (with inflation off), and it needs to be at least 80 quality. (and I waited for about 25 years for 30 AIs to setup their ecosystem).

Oil at current version performs roughly the same as 1 single retail product.

[Arcnor]

We honestly just need is the ability to sell gasoline as a product. Give it a high necessity and let it be a product added to the Automotive class

[counting]

We honestly just need is the ability to sell gasoline as a product. Give it a high necessity and let it be a product added to the Automotive class

It will be one hell of a product if it could reflects real world consumption. U.S alone consume more than 20 million barrels of oil per day, over 7 billion a year. Compare to the total reserve of an oil well in game is usually less than a "tiny" 5 million barrels.

This is the reason why big oil company has such huge revenue in real world. The price you paid for gasoline is embedded in almost every commodity (during production, used as basic materials, shipping, etc). And we are not considering electricity generation, natural gas and coal yet. Energy production is a really huge business sector.