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About 180,000 barrels a day of Canadian oil travels by rail today, the U.S. study said. But capacity is poised to jump to 1.1 million barrels daily by year-end as companies such as ExxonMobil Corp., MEG Energy and Cenovus Energy Inc. pour millions into new tank cars and rail-loading terminals.

“The conclusion that we come to is that rail will likely be able to accommodate new production if pipelines are delayed and not constructed,” Mr. Girling said. Companies “recognize that that is not the most efficient, safest way to move their product to market but it has to get to market.”

While rail has boomed, regulators are taking a closer look at the method of shipping after a series of fiery derailments, including a deadly crash in Quebec last summer that killed 47 people. Some analysts say the scrutiny could drive up costs if the tank cars which are deemed especially risky are phased out of service.

That could make Keystone more vital to Alberta’s industry, which still faces chronic rationing of space on some export routes.

“This oil will get to market one way or the other,” said Greg Stringham, vice-president, oil sands and markets with the Canadian Association of Petroleum Producers. “But that really is a question of timing. If this is delayed further, of course, people are looking at rail as being the alternative.”

Oil sands production from northern Alberta is set to more than double to 4.3 million barrels a day by 2030, from about 1.9 million barrels last year, according to consultancy IHS CERA. The group said Keystone wouldn’t have a “material” impact on its outlook.

Suncor Energy Inc., a shipper on the conduit, declined to discuss the State Department’s report specifically. “As an industry it makes sense to provide this expanded connectivity,” spokeswoman Sneh Seetal said.

TransCanada did not provide a targeted start-up date for the project. Mr. Girling said the pipeline could be built over two summer construction seasons pending approvals.

But timelines remain fuzzy. “Technically there’s no deadline” on the national interest determination, a State Department spokesperson said at a press briefing Friday.