Lynton and Barnstaple - Operations and Development

First off, oil-burning locomotives do not remove the risk of lineside fire- as has been found in Colorado. Oil burners can, and regularly do, chuck lumps of unburnt carbon out the chimney, hot enough that they ignite on meeting oxygen.
Oil firing expensive in Britain, it is not legal to burn used motor-car engine oil as locomotive fuel, and we do not have domestic oil production. Oil costs around £830/1000l
which at 33,000Mj is about the same energy as a tonne of coal costing £450. Used efficiently, oil burning will be less than double the cost of coal burning-if the operators are able to. Eventually you will find a burner that is suited to your locomotive- but it will probably be on the 5th or 6th attempt. The various unsuccessful burner efforts will keep the locomotive out of traffic for quite a lot of its first ticket. All that then means the oil-burning locomotive would be less well used, so both drivers and firemen will be less skilled in the firing of the oil-burner, further harming the abilities to fire efficiently and economically.
On an oil burning locomotive, the fireman is controlling the dampers, airflow, oil flow valve and the atomizer valve constantly in response to the throttle opening, whereas on a coal burner he is controlling a large burning mass where nothing changes quite so very fast. It is the heat of the brick-arch which keeps the oil igniting- there isn't a spark plug ticking away. Quickly closing the regulator without reducing oil feed can suffocate the fire, which requires a quick, skilful response. Suddenly opening the regulator can draw so much draught that the burner is extinguished, and the brick arch the cools very quickly so that the oil will not re-light.
Obviously, if the fireman had 10 years on oil burners on the southern pacific he's going to take it in his stride, and the driver, with 25 years, is going to be 'driving for oil firing', but for a less experienced crew, the lack of skill and familiarity can lead to problems.
https://www.facebook.com/reel/1036002835694563
I understand this (film event) is not that uncommon, and 'not the worst I've seen' in the words of D&RGW crew.

 

Whilst this is the case, there is a large experience base of what oil firing works well on 2' gauge locomotives in the UK - for many years the Ffestiniog, Welsh Highland, Vale of Rheidol and Brecon Mountain railways were near exclusively oil fired, and that knowledge was won. This even, for a short while, included an L&B Manning Wardle, though Lyd was converted to coal for the economic reasons you suggest not long after completion.

John