PENN HILLS, Pa. (AP) _ The steel industry is working to remove the dirtiest ingredient in its 378- year-old steel recipe - coke.

The $44 million, four-year experiment in this Pittsburgh suburb to make steel in a cleaner, more efficient way could clear the air near coke ovens and help steelmakers meet federal pollution standards, but could also mean layoffs.

The American Iron and Steel Institute and U.S. Department of Energy unveiled their research on Tuesday.

''What you have is steel without all the stink,'' said Carnegie Mellon University professor R.J. Fruehan, a researcher on the project.

An American company will be selling steel made with the new cokeless process by 2005, said Ian Hughes, technology vice president at Inland Steel Corp.

At least one environmental activist is skeptical the changes will come anytime soon.

''Coke will be around for a long time, and it's certainly going to be another generation of our children before these changes are in place,'' said David Jasnow, a board member of the Group Against Smog and Pollution.

In the method first used in blast furnaces in 1612 in England, steel is made by melting iron ore to remove oxygen, then mixing the liquid iron with limestone and coke. Coke is almost pure carbon made by baking impurities from coal.

The iron-coke-limestone mixture then must go through two furnaces before it is finished into steel.

The experimental process mixes coal, iron ore and limestone to make liquid steel in one step.

Hughes said the new technology, combined with other advances in steel finishing and rolling, would cut the current 1,000-hour method of making steel to 10 hours while demanding the same amount of coal from American mines.

The steel industry's work force would be halved ''if all of this eventually works out,'' said project director Egil Aukrist.

The one-step process will cut energy costs by 20 percent, saving $10 to $25 per ton of steel, AISI said.

The process should help big steelmakers such as USX, Bethlehem Steel Corp and LTV Steel Co. regain market share lost to imports, said Joe Goodwin, director of the Center for Materials Research at Carnegie Mellon University.

Japanese steelmakers are developing technology similar to AISI's cokeless production, officials said.