General :: Using Sed And Grep With A Text String?

Q: Is there any way to use grep and sed with a string variable rather than with a file?

The problem: Im running through a LARGE (about 10,000 lines) xhtml file and need to replace every instance of lines beginning <p>~

The following code works but takes a long time mainlly because an in/out operation needs to be carried out on each line. If I could read from a string rather than a file it would take a much shorter time!

Code:
#!/bin/bash
count=$((0))
>tpf
echo "waiting....."

[Code].....