The prospects for bringing large amounts of Canadian heavy crude oil into the United States by train is a contentious issue as the U.S. government weighs whether to allow the controversial Keystone XL pipeline to go ahead.

An assumption that oil would move by rail without Keystone was a key part of a U.S. State Department report in March that found development of Canada's oil sands region will proceed at roughly the same rate, with or without the pipeline.

That finding undercut warnings from environmentalists that the pipeline would lead to a spike in greenhouse gas emissions.

Proponents for the roughly 1,200 mile (1,900 km) pipeline, delivering the oil in Canada's Alberta province to refineries on the U.S. Gulf Coast, say moving huge volumes of crude by rail would be dirtier and more prone to mishap than a pipeline and the market would adopt rail if the project were halted. The State Department report endorses that view.

But some industry officials, energy analysts and recent data raise questions about whether the industry is really eager to adopt crude-by-rail should the U.S. government rule against the TransCanada Corp pipeline.

They say train transport is so expensive that Canadian heavy crude, produced by processing bituminous sand, isn't likely to reach Texas and Louisiana in Keystone-like quantities by rail.

These experts also point to plentiful supplies of lighter crude oil from the Bakken shale formation in North Dakota, which is roughly 900 miles closer to the Gulf than the hub of Canadian oil sands production, and plenty of heavy crude from traditional sources such as Saudi Arabia, Mexico and Venezuela, as signs that Gulf Coast refiners can get along without Keystone.

The U.S. government is expected to make a final decision before the end of the year on the Keystone XL pipeline, which is designed to carry as much as 830,000 barrels per day, most of it from Canada.

Comments on the State Department 's environmental assessment are due by April 22, and will be made publicly available, an official said.

MIisread Forecast

The State Department report cites two industry studies to predict that 200,000 barrels a day or more of Canadian heavy crude oil will reach Gulf Coast refiners by train by the end of this year.

Officials used that figure to bolster their argument that the oil industry has already decided rail is a good option for moving oil sands crude. "Limitations on pipeline transport would force more crude oil to be transported via other modes of transportation, such as rail, which would probably (but not certainly) be more expensive," the State Department said.

But one of the sources for the 200,000 barrels per day estimate, Calgary investment bank Peters & Co, says its forecast was misunderstood as being for just Gulf Coast-bound oil when it included shipments to Eastern Canada and other refiners.

"We haven't tracked exactly where those barrels are going," said Tyler Reardon, a spokesman for Peters & Co.

The other source for the number, Hart Energy, did predict in a report last year that 250,000 barrels per day of heavy crude from Western Canada would be reaching the Gulf Coast before the end of this year but its analysts are reviewing that forecast.

"Hart Energy continues to carefully monitor flows from Western Canada," said Susan Emfinger, a spokeswoman for the Houston energy consultant.

The latest figures from the U.S. Energy Information Administration show heavy crude shipments to the Gulf Coast from Canada by rail have a long way to go to meet the 200,000 figure. They have not exceeded 30,000 barrels per day in any of the past 12 months, though they did rise by two thirds to 25,000 barrels per day in January, the last month for which there are figures, from 15,000 in January 2012.

In fact, EIA data shows that little heavy crude from Canada is reaching the Gulf Coast via any route, with about 75 percent of 33 million barrels of heavy Canadian crude being processed in the Midwest in January and only 7 percent of it being processed further