The Association of American Railroads (AAR) says major U.S. railroads handled 233,811 carloads of crude oil last year, a 256% increase from 2011 with 65,571 carloads. As recently as 2008, the major, or Class I, railroads originated only 9,500 carloads of crude for the entire year, according to an AAR report.

Despite that significant growth, crude oil shipments only made up 0.8% of all freight traffic in 2012—but that represents a substantial increase from 0.2% in 2011. Energy industry statistics show more than half of the crude oil produced in the Williston basin’s Bakken shale play now goes to market by rail. However, rail’s share of crude volumes from other plays remains small.

Using third-quarter 2012 data, the report projects that railroads were handling roughly 500,000 bbl. per day of crude oil and added, “if recent patterns hold, crude oil movements by rail could easily surpass 600,000 bbl. per day (approximately 77,000 rail car loads) within a quarter or two.” The report mentions that railroad tank cars committed to crude transport range in size from 595 to 760 bbl. in capacity, varying by the type of crude carried.

“In recent years, demand for transporting crude oil by rail has grown faster than the supply of ideal tank cars, so some crude oil has been moving in cars that are smaller than the optimal size,” the report said. “However, as more new tank cars are built and put into crude oil service, 30,000 to 32,000 gallons (714 to 762 bbl.) per rail car should increasingly be the norm, depending on the mix of heavy and light crude.”

The report also points out railroads handle a large volume of sand used in hydraulic fracturing, pipe and other energyindustry products.

Offsetting the rise in crude shipments has been a decline in coal carloadings, the report said, as utilities switch fuels so power plants can take advantage of inexpensive natural gas produced by shale plays, such as the Marcellus and Utica.

“The coal share of electricity generation was 50% or higher each year from 1980 through 2003 and 48% as recently as 2008, but was down to 42% in 2011 and just 37% in the first nine months of 2012. Rail shipments of crude oil have skyrocketed in recent years due to the flexibility and other advantages that moving crude oil by rail offers,” the report concluded.

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