Former U.S. Sen. Ted Stevens says the AGIA pipeline plan has flopped and the state should put up billions to pay half the cost of an in-state natural gas pipeline project to Kenai.

It should also switch its support to the building of a trans-Alaska pipeline to Valdez that would export LNG to the Pacific Rim nations, Stevens told Anchorage businessmen at a Commonwealth North meeting Friday.

"Let's move ahead. We don't need any more open seasons, we don't need any more periods for analysis. We need an emphasis on getting the job done," he said.

This harkens back 35 years to when Stevens was among those in Alaska championing the idea of building a gas pipeline along the oil pipeline route to the coast. The Alaska Highway option eventually won out in the political arena, but failed in the economic arena.

For decades Stevens has said that the route through Canada was the best option to get Alaska gas to market, but no more. The economics have shifted because of the shale gas boom in the Lower 48 and the heavy demand in Asia for liquefied natural gas shipped by tanker, he said.

He presented a series of charts showing forecasts for a continual growth in domestic U.S. gas production and a growing need in Asia.

Japan and South Korea import nearly half of the liquefied natural gas in the world, while China and India are the fastest growing markets, he said.

Stevens' position is important because even though he is out of office, he remains one of the most influential political figures in Alaska.

“In the Senate, I supported moving forward with taking our natural gas to the largest and highest priced market at that time – which was our Midwestern states. I really tried to do everything I could to accelerate the construction of the pipeline through Canada to those states.”

“I have now changed that position and now support the bullet line, but I think it should go to  Kenai and I support the construction of the line to Valdez. I asked for the privilege of speaking to you to try to explain to Alaskans why I have so drastically changed my position. I think that these lines are needed not only for the needs of Alaska but I think we need to concentrate on processing as much of our gas as possible into LNG.” 

Stevens said the state should "put up half of this money now" to build a bullet line to Kenai from the North Slope. The next questions are: How much? And where is the economic analysis showing how much money is at risk?

He said the bullet line would be the largest project underway in the country and it "will represent Alaska's contribution to job creation and recovery in our nation." He said the state should encourage the building of the bullet line as soon as possible.

"I believe emergency power should be given to a special coordinator to devise ways to get the main pipeline from the North Slope to Valdez built in record time," he said.

This declaration that AGIA is dead puts Stevens at odds with the gas line approach taken by Gov. Sean Parnell, who continues to defend the AGIA approach as the state's best bet. This stance by Stevens may give Ralph Samuels and Bill Walker, Parnell's two major opponents in the GOP primary race for governor, a way to capitalize on their differences with Parnell.

The challengers wasted no time Friday in sending out press releases praising Stevens and echoing their views that the AGIA plan is a deadend.

One difference between the two statements was that while Samuels said a bullet line to Southcentral is "our energy highway to the future," Walker said the state needs a major pipeline to Valdez, with a spur to Southcentral.

Stevens wants the state to set aside the AGIA plan championed by former Gov. Sarah Palin and Parnell and the Legislature, which approved the plan 59-1 in 2008, and build it immediately. Samuels was on the losing end of that vote and he's happy to defend that position today. There are several other incumbent legislators who would love to go back in time and join him in the "no" column.

Stevens told Commonwealth North that getting U.S. approval to export large amounts of natural gas should not be a problem. This contradicts a statement  that he made in late 2007. 

At that time, when a Chinese company flirted with the concept of getting in on the gas pipeline sweepstakes, Stevens said there was no chance. With the shortage of natural gas in the U.S., "that gas is not going to be allowed to be exported," Stevens said.

He said Friday that times have changed and the gas shortage no longer exists in the Lower 48, which is why AGIA is not going to work and exports are the most promising option.

Legislators who want the state to start building a bullet line to Southcentral right now and shift the responsibility from a reluctant governor to the Alaska Railroad will see Stevens' remarks as justification to push ahead.