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"From western Canada and the Bakken to Eagle Ford," the punchy brochure proclaims, "the BNSF network is well-positioned to move your crude to the markets you choose."

Transporting large volumes of North American oil by rail seems like yesterday's news, but slick corporate brochures from the likes of Burlington Northern Santa Fe (BNSF) gives a sense that the train carrying this trend has barely left the station, that the wheeled assault on the pipeline industry has just begun. For oil companies experiencing a dearth of refinery and port access – and suffering from the consequent price discounts – the cargo-hungry rail industry is offering the light at the end of the tunnel. And it's a surprisingly bright light of diversified market access, plentiful capacity and competitive tolls that is on track to be realized sooner than later.

The rapid uptake of rail in transporting oil, the growth in its operational scale, and the determination of companies rushing to hitch up iron horses to their tanker cars is a remarkable testament to the power of the free market to resolve price distortions.

"A single BNSF unit train can haul 81,000 barrels of crude," says the brochure with a large emphasis on the 81,000. In other words, this is no milk run of grain, coal and lumber with an afterthought of oil hooked up at the back by the caboose. A unit train is dedicated to hauling only oil with 100-plus tanker cars. A non-stop charter – from oil field to refinery – brings economies of scale to an operation that is intent on competing head-to-head on costs with the pipeline carriers for the long haul.

The math is simple: 10 unit trains a day equals one Keystone XL. Importantly, the train engineer's driving orders won't always follow the same track over and over again, or be limited to a handful of select refineries. BNSF claims it will be serving 50 oily destinations by the end of 2014. And BNSF is only one of what half-a-dozen major railroad companies are doing. Here, north of the border, Canada's CN and CP are well into the fray too. Producers will have a choice of refineries like never before, and vice versa.

Why should this trend be surprising? Over the past 18 months, the widening price differentials on a barrel of oil meant that there were billions of dollars being left on the table for free market opportunists to come and exploit. Slow moving pipelines, encumbered by tortoise-paced regulatory processes and social licence headwinds, have had to sit impatiently on the sidelines and watch their market share being hauled away.

What is most remarkable is the speed of rail access development. The trend is acute in the light, tight oil (LTO) play in North Dakota's Bakken, where nearly every barrel leaves the state on four wheels. Capacity was put in place to move over 500,000 barrels a day in just 18 months. It takes longer than that to open an ink pad in the regulatory bureaucracy, let alone rubber stamp a pipeline application.

Mention Keystone XL and the rail folks can barely hold back their hubris. They relish in the delays and lightning rod of attention, knowing that the approval paperwork that's collecting dust on the President's desk means that it, and other such projects, are losing relevance with each new tanker car that is built. Canadian rail shipments of crude oil are rapidly gaining momentum, having grown by 200,000 barrels a day in just over two years.

Yet rail companies should ease up on their hubris, because infrastructure booms often result in overcapacity. As unintuitive as it sounds during this period of constraint, too much transport capacity in this segment of the oil supply chain – rail plus pipe – may be heading toward the industry like a freight train. By the end of the decade more pipelines are likely to be built; the political message mill is even signalling that Keystone may be on track for approval. Yes, it's hard to believe that the North American oil industry can quickly go from a dearth of transportation capacity and wide differentials, to an efficient market with excess capacity and wide spectrum of market options. But that's where the trends are heading right now.

The train has left the station. Once infrastructure like rail is built, it represents a sunk-cost investment that is there to serve and compete in the market for a long time. It's ironic that over the next couple of years the upstream oil industry is set to be in a far more enviable position of transport options and capacity than before the price differential blowouts – and in a more desirable position than just having a couple of new pipelines.

It all goes to show that trains can pull hard on an opportunity, but not harder than the free market.