Skipping over all the specific political drama swirling about TransCanada Corp’s (TSX: TRP, NYSE: TRP) Keystone XL project, one very salient point its delay illustrates is that the oil and gas pipeline industry is challenged by execution.

One of the other major North American pipeline operators, Enbridge Inc (TSX: ENB, NYSE: ENB), is enduring delays similar to what TransCanada’s experiencing with its 1,179-mile extension to the existing Keystone Pipeline System (KPS), as environmental and indigenous groups in the US and Canada bring pressure to bear on politicians on both sides of the border.

In some cases opposition is based on the desire to stop production of the Canadian oil sands. In others native populations simply want to be compensated more generously for ceding tracts of land over which new pipelines will be built. There have also been raised legitimate concerns about the impact of new pipelines on existing natural resources, one in particular that is the main source of potable water for the US Midwest.

Keystone XL would carry 510,000 barrels of oil per day from Hardisty, Alberta, to Steele City, Nebraska, and eventually on to the US Gulf Coast for refining and potential export in to global oil markets, boosting total capacity for the KPS to 1.1 million barrels per day.

President Obama rejected TransCanada’s Keystone XL permit application in January 2012 due to concerns about the impact construction activity and potential pipeline spills would have on the Ogallala Aquifer in Nebraska. TransCanada has resubmitted its application for a presidential permit to the US State Dept, including a proposal to re-route the pipeline around the areas of concern. A decision is expected by early 2013.

Enbridge’s Northern Gateway is a proposed twin-pipeline system that would carry 525,000 barrels of oil per day from Edmonton, Alberta, to Kitimat, British Columbia, and 193,000 barrels of condensate per day from Kitimat to Edmonton. Northern Gateway is a prime piece of infrastructure that, it’s hoped, will link Canadian crude producers to Asian consumers.

Public hearings before a Canadian federal Joint Review Panel into the project has so far been about environmental issues. But proceedings in Edmonton that continued this week were solely into economic impacts and benefits.

Into the gap created by permitting delays on both sides of the border there is opportunity, and into it has stepped North American railroad operators such as Canadian National Railway (TSX: CNR, NYSE: CNI) and Canadian Pacific Railway (TSX: CP, NYSE: CP).

This isn’t to suggest that railcars can replace pipelines as the primary method of transporting crude oil over long distances. That can’t and won’t happen. There’s insufficient capacity to move all the North American crude to where it needs to go for processing on the continent, and there is also growing demand from Asia that producers are anxious to meet.

Moving crude by rail compares favorably, in general, to doing it via pipelines. A spring 2012 report from Standard & Poor’s found a barrel of diluted bitumen is transported at a cost of USD7 by pipeline versus USD6 to USD8 by rail. This report also concluded that crude can  be moved to the US Gulf Coast from Alberta in about one-fifth the time of pipelines, with the capital cost to expand rail infrastructure about one-tenth that of the cost of adding incremental pipeline capacity.

But the rise in US oil production from North Dakota’s Bakken Shale formation has forced Canadian oil sands producers to sell into a saturated market in the US Midwest and take a lower price for their output than would be available through access to West Coast export terminals. This is the breach that Northern Gateway would solve for Canadian producers.

Canadian National is moving crude oil, including pure bitumen, from Western Canada to markets across Canada and the US, including the US Gulf Coast and California. According to CN Rail there are currently no shipments going to Canada’s West Coast ports for export due to a lack of infrastructure to unload crude oil from rail cars onto ships.

In 2011 CN moved approximately 5,000 cars of crude oil; there are between 550 and 680 barrels of oil per rail car, depending on type of product and car. The company expects to transport more than 30,000 carloads of crude oil in 2012 to various North American markets.

In July CN contracted with Canadian junior exploration and production company Southern Pacific Resource Corp (TSX: STP, OTC: STPJF) to transport bitumen to the US Gulf Coast via its rail network.

According to a statement announcing the deal, “Southern Pacific expects to significantly increase its plant gate bitumen netback using rail transportation that reduces diluent costs.” The arrangement also allows Southern Pacific access to Brent-based pricing as opposed to selling its bitumen into a pipeline that offers access to pricing based on West Texas Intermediate (WTI) crude.

Southern Pacific anticipates that the use of CN’s services will allow it “to generate attractive returns” from the first phase of its STP-McKay Thermal Project, which is the only new steam assisted gravity drainage  oil sands project anticipated to start up in 2012. STP-McKay is located about 28 miles northwest of Fort McMurray, Alberta. The initial stage of the project is designed to recover 12,000 barrels a day of bitumen.

Canadian Pacific had forecast crude-by-rail growth from 13,000 carloads in 2011 to 70,000 carloads by 2014.  Based on rising demand, however, CP now expects to reach 70,000 carloads by 2013, with shipments to the northeastern US and the Gulf Coast. CP isn’t currently shipping any oil sands crude to Canada’s West Coast but is exploring the option.

According to a recent report in the Toronto Globe and Mail, “upward of 80,000 barrels a day of Canadian oil is now moving to market on rail cars.”

That’s out of a total of about 2.3 million barrels a day Canada exports, most of which is moved by the traditional method, pipelines. But, as the Globe and Mail notes, the use of railroad transportation to move oil is on the rise. A year ago only about 5,000 barrels a day was shipped on rail cars from Alberta. By 2013 railroad industry executives forecast in excess of 200,000 barrels a day.