This is the machine that creates the giant smoke rings!

I believe that it throws a large amount of fuel (probably gasoline) that is ignited in the air.

The fuel is propelled using compressed natural gas, and the fuel is ignited just when it exits the vertical pipe (using a propane torch).

The burning fuel creates a vortex, making a large black smoke ring in the sky.

Photo taken at the Burning Man 2005 festival (Black Rock Desert, Nevada).