by

1a. He earned some extra money by working late.
1b. He earned some extra money working late.
2a. By using fire and water, steam is produced.
2b. Using fire and water, steam is produced.
Are these sentences fine. Please comment.
Thanks.

1a. He earned some extra money by working late. (OK)
1b. He earned some extra money working late. (OK)
2a & 2b. (By) using fire and water, we produce steam. (Acceptable)

Here the question of ‘Who uses fire and water’ arises; naturally, it cannot be ‘steam’. So it is better to put it in the active voice.) OR ‘Steam is produced with fire and water’ can be acceptable.

Anglophile,
Can I say as below:

  1. Steam is produced using fire and water.
  2. Steam is produced by using fire and water.
    Please comment.
    Thanks

My preference would be for (1). Your statement with ‘by using’ raises the question of what you do with the fire and water.

Considering the science involved, strictly speaking nowadays, fire is not required. There are other means of transferring heat.
Heating water so that it boils produces steam.