Before rail service came to the Williston basin, much of the oil produced in the Bakken was held hostage to overloaded or out-of-reach pipelines.

Since 2009, the amount of crude shipped by U.S. railcars has increased 50 fold and vigorous growth appears to be ahead for rails, according to Raymond James’ J. Marshall Adkins, director of energy research.

Pipelines, by far, are the dominate mover of oil in the U.S. and Canada. But rail offers several advantages. For one, it’s a faster mode of delivery than traditional pipelines, particularly when configurations of up to 120 cars—enough for 60,000- 72,000 bbl. of crude oil —carry a single commodity.

A single unit train traveling from Alberta to the U.S. Gulf Coast requires eight to 10 days for delivery. A pipeline delivering the same amount of product is estimated to require 40-50 days. From the Bakken to U.S. Gulf Coast, train time is about five to six days, for pipe about 40 days.

The net effect for E&P producers means many with several hundred million dollars in product inventory could see significantly faster working capital turns and a lower cost of carry, Raymond James reports said.

Despite the coming of high-capacity North American pipelines during the next two or three years, such as the Keystone XL, North American crude-by-rail (CBR) will increase by 150% during the same period, reaching a 740,000 carloads/year annualized run-rate by the fourth quarter of 2015, said Raymond James analyst Steven P. Hansen in a recent CBR study.

“In no uncertain terms, we believe E&P producers seek to land in the market with the highest net-back—period,” Hansen said, referring to costs such as shipping of moving crude to market. “As such in today’s new world of evolving regional pricing differentials, which we believe is sustained as a byproduct of our aggressive U.S. supply forecast, we also believe that rail will often provide the highest net-back opportunity.”

However, a recent contraction in regional U.S. oil price spreads has prompted some investors to call an end to the CBR theme.

“We believe that CBR is here to stay,” Adkins said in a recent industry brief. “In fact, we believe [rail] is positioned to grow as a long-term, strategic complement to pipelines [not necessarily a replacement], providing a strategic source of diversification for both light-sweet and heavy grades of crude.”

Though many investors think rail use will erode as new pipeline capacity emerges, Raymond James says railroad flexibility has become important in gaining strategic value for producers.

CBR’s meteoric rise over the past three years has been driven primarily out of necessity, fueled by the explosion of oil production from non-traditional basins with limited pipeline infrastructure.

With oil stranded in the Bakken, an enormous incentive developed to create an alternative takeaway solution.

CBR capitalized on its ability to rapidly deploy loading infrastructure on well-established networks, offering a “critical relief valve for this widening production-pipeline gap,” Hansen said.

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