Mayor Marion S. Barry Jr. yesterday said that the city has received a $298,000 federal grant to study the possibility of processing the city's garbage to produce energy.

It was not clear yesterday what kind of garbage processing plant the city would consider. Those already tested include plants that condense garbage into pellets to be burned as fuel, plants that burn garbage to produce steam or hot water for industrial use, systems that burn garbage with little oxygen to produce gas, oil or char, and plants that allow microorganisms to feed on garbage and produce methane gas or sugar which is fermented to produce alcohol or gasohol.

Barry announced a comprehensive resource recycling program that he said would make Washington a leader in resource recovery. However, at least 12 other cities within the past five years, including Baltimore, have embarked on similar programs and nearly all are losing money because they do not work properly.

Baltimore, for instance, was plagued with nearly daily breakdowns and pollution problems with its garbage for energy plant. It was shut down for 15 months to make $4.5 million in improvements. It just began scaled down operations last June and it is reportedly working much better.

The city will match the federal grant with $60,000 in city revenues and $57,800 if in-kind services.

When asked why the city would embark on a program that has lost money for other cities, Barry said that the federal grant will help the city to perfect the system. "Obviously it needs additional work," Barry said. "We're not saying we know all the answers."

The program also includes the saving by city employes of white paper, computer printouts and punch cards and other office paper for recycling. Newspapers in Ward 4 will also be collected for recyling as part of a program that will be explained to other parts of the city next year, Barry said.

"I sought some legislative means of reducing our total energy consumption when I was a council member," Barry said. "I expect that this new program will substantially reduce the need for expanded landfill and other trash disposal alternatives. The program also has the potential to actually produce energy and add revenues for the city."

Most of the nation's resource recovery programs are losing money and municipalities with them have estimated that they will not become profitable, if ever, until at least five years of operation.

After numerous questions about the feasibility of the plan, Barry told reporters, "That's what leadership is about. You have to try this. You have to try something. We're determined to work on this. I've done the impossible before."