JUNEAU -- The drive to build an in-state gas pipeline, with public funds if necessary, got a boost Thursday with the enthusiastic testimony of two of Alaska's elder statesmen, Ted Stevens and Bill Sheffield, with Frank Murkowski offering more conditional support.

The three testified on a bill by Sens. Lesil McGuire, R-Anchorage, and Bettye Davis, D-Anchorage, that is becoming the talk of the Legislature three weeks after its introduction.

Senate Bill 287 would put the means of gas production in the hands of the state by taking advantage of the state-owned Alaska Railroad Corp.'s existing -- but never exercised -- authority to finance, build and operate a natural gas pipeline from the North Slope through Fairbanks to Kenai. The bill also directs the railroad to look for additional overseas markets so Alaska consumers wouldn't bear the sole cost of the project in their gas bills.

The back room divider of the Senate Resources Committee had to be thrown open to accommodate the crowd that showed up for the hearing, which McGuire chaired. In addition to the former senators and governors, the committee heard from outgoing railroad chief executive Pat Gamble, who said the railroad is capable and ready for the challenge. Gamble was selected this week to head the University of Alaska system.

Stevens, who represented Alaska in the U.S. Senate for 40 years, has already said the state should immediately start organizing the construction project. In a speech last week in Anchorage, he broke with his own past support of a line through Canada to the Lower 48 because of the growing surplus of U.S. gas.

"I hope you will not wait for one of these open seasons or wait for a period of time for a bureaucracy to analyze what is to be done," Stevens said, taking a swipe at the process set up under the Alaska Gasline Inducement Act of 2008. He spoke on a teleconference line from Washington, D.C.

"I do urge that you listen to those who say, 'Do something now.' Don't go home without doing something now to start this gas pipeline. Unless something starts this year, the economy of our state is going to go downhill very rapidly," Stevens said.

Stevens suggested that while the state should finance the line, it should let someone else build it.

"If the state invests in that line, it will be a co-owner of that line, it will have money from severance taxes, from royalties, and at the same time will share in the profits from the line," he said.

Sheffield, a former governor and railroad president who now is director of the Anchorage port, also spoke by phone from Washington.

"The public out there, the Alaskans, they really want something to happen. Think about it -- nothing really big has happened in Alaska for a long time," said Sheffield, who's overseeing a $700 million expansion of the Anchorage port. "We haven't built anything, we haven't started anything, we haven't lowered the cost of living for anybody."

Sheffield said the state should at least finance a portion of the line, and expressed confidence that the railroad could build it if called upon. Like Stevens, he said the time was ripe.

"You're creating jobs, lot of jobs, throughout Alaska. You're creating lower cost of living, creating new enterprises, new businesses," Sheffield said. "It would just be the greatest thing that the state could do for its population."

Murkowski served 22 years in the Senate and four as governor before being defeated in 2006 by Sarah Palin, the architect of current gas line policy under attack by the in-state boosters.

"I am for an aggressive policy to achieve a bullet-line project by mid-decade," Murkowski said, referring to the nickname for a line running straight from the North Slope to Kenai by way of Fairbanks and Anchorage.

But Murkowski stopped short of saying how the line should be built, saying there should be a firm business plan in place first. If it comes to it, the railroad "can best represent the state's interests" and urged a halt to the "civil war" among state departments vying for a piece of the action.

If the state contributed money, it should equal the 20 percent royalty and severance taxes it would collect on the gas, he said, and for that get a minority ownership stake in the line.

Gamble said at least one major industrial customer is needed to "anchor" a line, such as a plant to liquefy the gas and send it to Asia. Otherwise, the gas would be too expensive for residents.

The railroad knows how to put together bonding packages, how to work with the federal government with funding and rights of way, and how to build a "great engineering team," though he conceded it has never built anything on the scale of the proposed pipeline.

Earlier in the day, the Senate minority caucus of four Republicans urged the legislature to slow down talk of a state-built line.

"I disagree with my friend Sen. Ted Stevens," said Sen. Tom Wagoner, R-Kenai, who's also a member of the Resources Committee.

Wagoner said it was premature to consider anything outside the current legislative framework established two years ago under AGIA. Under the process, the company with the state license to build a line, TransCanada, will be soliciting North Slope producers for gas to ship down the line to market. A competing project, Denali, will also be seeking gas customers.

"We should look at what happens in open season with both of these projects," Wagoner said. "There is already an avenue in AGIA that brings a line to tidewater in Valdez and makes allowances for a spur line to come into Southcentral Alaska. The state of Alaska doesn't have to touch it."

In a letter Thursday to McGuire, Gov. Sean Parnell said her bill “is headed in the right direction.” He said he offered opportunities to Alaska, especially if the large-scale TransAlaska pipeline project falls through.

Find Richard Mauer online at adn.com/contact/rmauer or call 257-4345.