The fires result from autoignition of sulfur-rich lignite deposits. The clouds of smoke have given the region its name. Over time the sulfur dioxide from the smoke has acidified the shallow ponds in the tundra dotting the area, down to a pH lower than 2. Elevated concentrations of metals occur in these acidic ponds. Soils and sediments have also been chemically altered. The acidic biota in the ponds are characteristic of acidic environments worldwide, in contrast to the typically Arctic biota in adjacent alkaline ponds. Although the soil of the region contains much limestone, the buffer effect has completely disappeared.
The nearest community, Paulatuk, which is about 105 km east, is named in recognition of the coal found in the area, traditionally spelt "Paulatuuq" or "place of coal".