Bioprocessing of coal is developing along several fronts, each of potential significance to utilities. Researchers have found a fungus, polyporous versicolor, which can liquefy certain kinds of coal and scientists have genetically engineered bacteria that remove sulfur and ash-forming metal impurities from coal. Research programs are being undertaken to find organisms that will convert lignite into gaseous methane to produce gaseous fuel more economically than the current coal gasification methods. Researchers looking for ways to remove sulfur from coal before it is burned are evaluating the use of a bacterium called thiobacillus ferroxidans to enhance the physical removal of pyrite. 2 refs.