Narcozine Gas is a chemical device used as a weapon by the UNSC. When inhaled, the gas quickly causes paralysis, and extended exposure causes pulmonary edema (swelling of fluid in the lungs), which can quickly become fatal due to suffocation and drowning.
The UNSC didn't actually use the agent in battle. It was instead installed as a security measure in ONI bases, such as CASTLE Base, located on Reach, in order to neutralize potential threats to security. AIs inside these bases were given broad discretionary powers, with the power to use this gas on any humans who violate protocol and access classified information. The AI Araquiel threatened to use this gas against Dr. Catherine Halsey at CASTLE Base on Reach. In return, Halsey activated the AI's fail-safe function, effectively erasing Araquiel.