I think the correct answer would be the third option. Organisms that help break down dead organic material so it can be recycled into a usable form for other organisms are called decomposers and this would include some of the bacteria. Also, there is a number of bacteria that are capable of breaking down some of the harmful products like in recent studies there are bacteria that could dechlorinate the toxic PCB substance. Some bacteria, as well, lives in the human intestines which aids in the breaking down of the food into useful molecules. The third option is partially true since there are some bacteria like the cyanobacteria which produces oxygen but it does not contribute largely to the oxygen present in the atmosphere.