Smoking is a main contributing factor to developing COPD and there has been an ongoing debate as to whether Oxygen therapy should be prescribed to patients who are still smoking.
The reasons that oxygen might not be allowed are because in the presence of oxygen, things (like oxygen tubing, facial hair, clothing) are much more flammable and patients have set fire to their heads resulting in serious burns and occasionally even death.
Oxygen therapy is delivered through plastic tubes that go up the patients’ nostrils. Quite a lot of oxygen comes out of the nostrils and effectively bathes the face, head and clothing. Patients have set fire to themselves when not smoking, for example lighting stoves, and one patient was killed when an e-cigarette exploded.
The tubes that the oxygen goes through are made of PVC which is quite flammable and releases highly flammable vinyl chloride gas when it burns.
There is no safe way to smoke when using home oxygen. Until patients quit, they can practice safer smoking. Should an individual need to smoke, it’s important to first turn off the tank, and wait 10 full minutes before going outside to smoke. This practice should decrease the amount of oxygen in the home and on the person. The best way for patients to protect themselves, their families, neighbours, and emergency responders is to quit smoking.
Oxygen is a fundamental requirement for life and therefore taking away oxygen from a patient who will die without it is difficult and perhaps immoral, bringing into consideration other aspects of smoking.
Smokers quite often blame themselves for developing an illness where they are a burden on their families and often feel anxious, depressed and guilty. Oxygen therapy provides relief from some of the anxiety, but sadly effective psychological support is often lacking and oxygen is a kind of substitute.
The benefits from reducing smoking, such as fewer deaths and diseases of the heart and lungs can be discounted by 0% to offset the loss in pleasure that smokers suffer when they quit.  For many smokers the fear of losing that pleasure from smoking and perhaps enjoying life a lot less is justifiable in perhaps dying sooner.
Patients are told not to smoke, but recent surveys show the percentage of home oxygen users still smoking to be between 14 and 51%. The use of a less combustible material for cannula tubing and a more efficient oxygen delivery system may reduce the incidence of such burns. Another suggestion would be labelling the oxygen cylinders with large stickers emphasizing the danger of smoking in the presence of oxygen.
In summary there are grave risks that COPD patients take if they smoke on oxygen therapy, such as a detrimental effect on health and disease progression and the risk of burns to themselves and others.  However many find that oxygen therapy and the continuation of smoking improves their quality of life, both from the benefits of oxygen therapy and the pleasure obtained from smoking. There is a debate as to whether the importance of a patient’s choice to choose how they live and die is outweighed by the possible risks and dangers to themselves and others.
References: http://abetternhs.wordpress.com