Burlington Northern is among the U.S. and Canadian railroads that stand to make huge gains from the Obama Administration's decision to reject the Keystone Pipeline permit. That railroad is a unit of Warren Buffett's Berkshire-Hathaway Inc., and Bloomberg Business News is reporting that the railroad is well positioned to carry the oil.

According to the State Department report on Keystone, "The rail option, though costlier, would lessen the evironmental impact such as loss of wetlands and agricultural productivity, compared to the pipeline. Railroads too present environmental issues. Moving crude on trains produces more global warming gases than a pipeline. Gas emissions would be worse."

Burlington Northern already carries about 25 percent of the oil from the Bakken oil fields, according to spokeswoman Krista York-Wooley, and the company can carry higher volumes from North Dakota or Alberta, she said.

Jim Young, CEO of Union Pacific Corp. based in Omaha, Nebraska, said he anticipates big increases in rail traffic with or ithout the Keystone pipeline. Rail will be a major player involved in moving the pipe and much of the construction business in building it, he said. "On the other and, if you don't build any pipeline capacity, you're going to be moving a lot of crude by train."

Clearly, the Bakken and Alberta oil boom is revitalizing rail carriers. "During 2011, rail capacity in the region tripled to almost 300,000 barrels per day as higher production exceeded what pipelines could accommodate," according to the State Department's report.

Shipping oil using tank cars on rail costs about $3 more per barrel than pipeline transport, using prices in North Dakota, and that differential is unlikely to slow the development of oil sands crude if no pipeline is built, the report added.

Canadian rail companies are also poised to prosper. Canadian Pacific Railway's shipments from North Dakota have climbed from 500 carloads in 2009 to 13,000 carloads in 2011.

Canadian National Railway Co. said it considers Alberta's oil sands a chance to expand its business. "CN seeps potential for outbound movement of oil sands products such as bitumen and synthetic crude to refineries in the U.S. Gulf Coast region, or, eventually trough West Coast ports to offshre markets."

Rail allows shippers to reach different markets and capture better prices at refineries, according to John Mims, a Virginia based transportation analyst. So either way that Keystone goes, we should expect that rail will become an increasingly critical part of the delivery system for Canada's crude oil.

And, of course, Mr. Buffett's railroad will likely make him even richer than he is today.