One Washington-area company believes it can harness microorganisms to help clean up the Chesapeake Bay, while another hopes its bacteria will help neutralize acid rain.

Both are exploring the low-glamor end of a high-tech business by applying biotechnology to environmental pollution, and both concede that their success may depend as much on government regulation and economic factors beyond their control as on the quality of their products.

Biospherics Inc., of Rockville, sells a wastewater treatment process that uses naturally occurring microbes to remove phosphorus, the cause of excessive algae and other aquatic vegetation in many streams and rivers.

Atlantic Research Corp., of Alexandria, recently won a patent on a genetically engineered organism that strips coal of much of its sulfur -- the substance that is believed to play a role in the high acid levels of lakes and soil in the Northeast and Canada.

Biospherics' process has been available for purchase since 1971, and now is used by 14 treatment plants across the country, including one on the Chesapeake Bay.

"We're one of the largest users of biotechnology," said Gilbert V. Levin, president of Biospherics, at a press conference last week to introduce a new version of the company's PhoStrip process. "We're producing 130 million gallons a day of biotech-treated wastewater."

ARC's process, however, is a long way from the market, the company says. Although it has won an award for inventiveness, the method requires further research. Moreover, its commercial prospects are tied to the use of coal and the pressure on industry to clean up the air. Recently, the tumbling price of oil has hurt the cost-effectiveness of coal, and the federal government has shown little inclination for imposing stringent sulfur-removal requirements, the company and industry analysts say.

"It seems to hold out very interesting possibilities," Eliot Benson, vice president and research director of Ferris & Co. Inc., said of the ARC process. "But it's all pretty much long-range stuff."

The congressional Office of Technology Assessment, in a report on the commercial potential of biotechnology, noted the role of government regulation. "Biotechnological solutions to these environmental problems are likely to be pursued only if the government sets goals and criteria for reducing these contaminants that must be met by both the public and private sectors."

Biospherics has benefited from such regulation. In the Chesapeake Bay alone, some 40 treatment plants are under government orders to remove phosphorus.

The Little Patuxent Wastewater Treatment Plant in Savage, Md., chose Biospherics' PhoStrip technology in 1981 from among several possible methods of complying with state orders to find "some means of removing phosphorus," said Daniel Ward, process control engineer of the facility. "It's worked well."

"As an Annapolis resident and long-standing advocate of cleaning up the Chesapeake Bay," Levin said, "I take considerable pleasure in the present and increasing contribution that the PhoStrip technology brings to protecting the Bay."

The company would prefer to make a bigger contribution -- by convincing more plants to use its process. Levin said that one problem was resistance to new technology among plant engineers and the heads of public agencies. "They don't want to be the ones to try a new process."

The OTA report made a similar observation about such technologies: "The primary limitation to commercialization will be the rate of acceptance by the treatment plant operators."

Traditional means of phosphorus removal include a reliance on chemicals, or the "old brute-force method," according to Levin. Biospherics argues that its PhoStrip method cuts costs and produces less sludge.

The process employs naturally occurring, living microbes to concentrate phosphorus for easy removal. The organisms live in the wastewater and absorb the mineral as a nutrient, thriving in the sludge that is later separated from water in a settling tank.

The key to the original PhoStrip process is a phosphate stripper tank that denies the microbes oxygen and thus forces them to release the mineral in a concentrated form that can be easily removed. PhoStrip II adds an extra step, a "pre-stripper" tank, which prods the microbes into absorbing more phosphorus by "feeding" them an extra supply of wastewater.

Biospherics contends that the process can pay for itself in two to five years. For example, a plant treating 50 million gallons a day might spend $4 million to install the system, and then save $2 million a year by not buying chemicals and by removing less sludge, said Peter T. Young, the company's vice president of finance. The cost of the system would be less if the plant already had tanks it could convert, he said.

PhoStrip removes 99.3 percent of the phosphorus in wastewater, which is often about 10 parts per million before it is treated, Levin said. A report prepared by a consulting firm for the U.S. Environmental Protection Agency said that PhoStrip consistently reduces phosphorus levels to less than 1.0 milligram per liter, and concluded that the method is cost-effective.

ARC, by contrast, says it cannot yet tell what the market might be for its sulfur-stripping microbes. "It will depend on legislation for decreasing sulfur oxides released into the atmosphere during the burning of coal," the company said in a statement last week, noting that "such legislation is not yet on the books, and it is uncertain when and if such legislation will be enacted and put into effect."

Adding that oil prices and the energy market as a whole also will play a role, ARC said that "with so many unknowns and variables, it is impossible to calculate the market potential at this time."

The ARC process has attracted some congressional attention. Last fall, ARC microbiologist Jenefir Isbister won the Congressional Science and Technology Award for her work in developing the process, which would lower the costs of cleaning coal before it is burned.

Burning untreated coal releases sulfurous fumes, which are then returned to the earth as "acid rain," a source of tension between U.S. industries that use coal and Canadian officials who want the pollution stopped.

The ARC process takes a living microorganism that occurs naturally in soil, and then alters its genetic structure so the bacterium will produce a mix of enzymes. The microbe attaches itself to the coal, and then starts churning out enzymes that break down the bonds linking the carbon and sulfur molecules in the coal, an ARC spokeswoman said. The sulfur then mixes with oxygen to form a water-soluble sulfate that can be washed away.

The process grew out of ARC's program to develop a coal-water fuel as an alternative energy source. ARC is better known as one of the nation's largest manufacturers of solid propellant rockets.

Benson, of Ferris & Co., said the sulfur-stripping process is just one indication of "a lot of great technology over there that does not get appreciated."