A secretive project dubbed "The Gorilla" by inhabitants of Elk Point, S.D., turns out to be a planned 400,000 barrel-a-day oil refinery. That's right. Do not adjust your computer monitor. A refinery. If actually built, it would be the first new one in this country since Marathon Oil (NYSE:MRO) opened its Garyville, La., plant in 1976.

This Kong-sized refinery plan weighs in at an estimated $10 billion construction cost. The idea is to bring heavy crude via pipeline from a Canadian oil sands operator like Suncor (NYSE:SU) or Petro-Canada (NYSE:PCZ). The pipeline aspect is not a novel idea -- I've heard Frontier Oil (NYSE:FTO) discuss similar aspirations to bring more Canadian heavy crude to its Midwestern refineries. What is novel -- aside from the whole building-a-new-refinery-from-scratch thing -- is the proposed project's carbon capture and storage ambition. The state governor made it sound as if this emissions-cutting aspect is a sure thing. As far as I know, however, such a capacity has not been commercially demonstrated for any project on the scale of a power plant or a refinery.

The deep pocket behind the proposed project is a privately held Texas oil outfit called Hyperion Resources. Hyperion, which also has an eye on Iraqi oil, last made headlines when it brought over the Iraqi Youth Soccer Team to play in America. The man at the helm is related to the Hunt family by marriage, which says to me that there are even deeper pockets behind the deep pockets. This could actually go somewhere.

The only other refinery plan in the U.S. that I'm aware of is the Arizona Clean Fuels project in Yuma, and that one has been dragging on for almost two decades. I imagine the regulatory hurdles may be somewhat lower in South Dakota, but the permitting is still going to be no picnic. With Oklahoma Sen. James Inhofe's Gas PRICE Act recently rejected, streamlined refinery permitting in the U.S. does not appear to be forthcoming.

In short, I wouldn't be rushing to short the shares of competitors Valero Energy (NYSE:VLO) or Tesoro (NYSE:TSO) just yet. That would be counting your gasoline before it's cracked.

Related Foolishness:

Fool contributor Toby Shute doesn't own shares in any company mentioned. There's nothing secretive about The Motley Fool's disclosure policy.