Not intended as weapons, these are the result of a Bysshe Company research team sent to Point Lookout to survey its rich natural gas deposits. The story goes that these deposits accumulated from the mass graves of thousands of Confederate prisoners who died near Point Lookout in the later years of the American Civil War, although the amount of natural gas that would provide would actually be negligible.
It deploys a cloud of natural gas on the target. As with all gas leaks, it will ignite from explosives, energy weapons and conventional fire while inside the cloud. This results in a fireball on the target.
17 bio-gas canisters in total can be found in the course of the quest An Antique Land in the excavated muck holes. 7 are located in the muck holes themselves, and 10 are rewarded upon completion of the questline. They cannot be found anywhere else.
The flame of the gas itself won't actually damage your enemy badly, but it will stun them, giving you an opportunity to flee should you choose to do so.
The canisters inflict fire damage to any enemies in the vicinity, though targets aren't set on fire. This is observable by hitting a very weak enemy with the canister, only to watch them die seconds afterwards.
The resulting gas doesn't disappear.
Enemies carrying weapons such as a flamer or heavy incinerator can be lit aflame instantly simply by throwing the canister at them, due to the flamer and heavy incinerator having a small flame at the end of the weapon which will ignite the gas.
Reverse-pickpocketing bio-gas canisters onto non-player characters will not kill them, instead just damaging them slightly.
When the grenade explodes, it gives out at least 5 radiation, dropping down to 1 radiation, as well as not ceasing until the gasses are ignited.
Bear traps, though unheated, will light a canister on fire if thrown into it, possibly because of any sparks created from the trap snapping shut.