Thanks to a certain Omaha resident, railroad stocks are suddenly in vogue. I thought I'd mention an interesting development at one of Canada's largest rail companies.

We've tended to keep Canadian Pacific (NYSE:CP) at arm's length, because it's never looked as attractive as its peer, Canadian National (NYSE:CNI). Nevertheless, Canadian Pacific's decision to hitch its fortunes to bustling oil sands activity is an interesting play. Oil sands are deposits of bitumen that need much processing before going to refineries.

Yesterday, the company announced a multi-year initiative to secure land and build out its rail network to the Industrial Heartland area outside Edmonton, Alberta. This is the planned site of huge oil sands-related infrastructure development getting under way over the next few years. Total SA (NYSE:TOT) is just the latest company to announce its intent to construct a bitumen upgrader in the region. Upgraders, which can cost well more than $5 billion to build, are needed to turn Alberta's heavy oil into a synthetic crude that regular refineries can process. Other companies with upgrader projects in the works include Statoil (NYSE:STO) and Petro-Canada (NYSE:PCZ).

Canadian Pacific benefits from the oil sands activity in two ways. First, it can meet a critical need in transporting raw materials during the construction phase. Then, once bitumen upgrading gets under way, there will be a new market for the byproducts.

Railroads don't casually build out their networks -- not since the 1890s, anyway. If the price tag on a bitumen upgrader wasn't enough to convince you that the oil sands are a meaningful, long-term phenomenon and not just an energy sideshow, maybe this development will grab your attention. Sure, there are speculative plays like Oilsands Quest (AMEX:BQI) out there, but industry leader Suncor (NYSE:SU) has been plugging away for 40 years, creating tremendous value in the process. If you're looking to invest in the space, I'd recommend that you direct your energy toward investigating Suncor.

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Fool contributor Toby Shute hasn't hitched his portfolio to any company mentioned. Total SA is a Motley Fool Income Investor recommendation. The Motley Fool's disclosure policy doesn't require an upgrade.