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Oil gets so hot that it catches fire all by itself.
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Water is poured into the burning chip pan.
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Water is denser than oil, so it sinks to the bottom of the chip pan (shown in red). As the water touches the bottom, it is heated above its boiling point and instantly vaporizes.
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The water vapour expands radpidly, ejecting the burning molten oil out of the chip pan and into the air where its surface area increases greatly and combustion proceeds much faster.
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Oil is heated strongly
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After some time, it gets hot enough to catch fire
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Pouring a very small amount of water into the fire ejects a plume of burning oil
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With all the oil burned, there is no more fuel to supply the fire
