The oxygen flow is generated from the hydrogen peroxide. The hydrogen peroxide molecule looks a lot like the water molecule, only it has an extra oxygen atom. When you add the yeast to the peroxide, it acts as a catalyst and breaks off that extra oxygen, which bubbles up and out of the hole in the lid.
It’s important that you don’t screw the lid onto the jar – just rest the lid (without the screw-on ring) on top of the jar.
Since there’s no nozzle on the end of the pasta, the fluid is going to be pretty slow out the exit tube. We’re also not adjusting the flow at all – it’s flowing at the rate it’s being generated inside the jar.
This particular rocket is a hybrid rocket, which means it uses a solid fuel source (the hydrocarbons in the pasta) and a liquid or gas oxidizer (which is the oxygen from the peroxide reaction).
The nice thing about this particular kind of rocket is that you can shut it off if things goes wrong (which you can’t do with solid state rockets, like Estes model rockets or most fireworks). Since the fuel is in a solid state, there’s no big explosion hazard like there is with liquid fuel rockets (imagine having a tank of liquid hydrogen… that’s a big explosion just waiting to happen).
The same type of rocket engine (hybrid) was used in Space Ship One!