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Do you think? My recipie for tomato sauce called for 1/4 cup of oil...
Where did you get the recipe? If it's a tested and approved recipe you have nothing to worry about. If it's not... you may or may not have something to worry about. Home canning of oil is thought to increase the risk of botulism growth in the food, but in some cases where the food is very acidic a little oil may be called for. People tend to feel strongly about canning either one way or the other -- some are firmly in the "only use tested recipes" camp, while others are okay with a little risk if the recipe has been used for many years without any reports of illness. Only you can decide which camp you belong in.
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Do you just want to can them or would you like to pickle and can them? If you want them pickled then you will use vinegar and they can be water bathed, but if you just want to can them without pickling, then you will need to pressure can them and no vinegar is required.
For just canning them you remove the skins and seeds, pack in pint jars covering with boiling water and leaving 1" headspace and then process for 35 min at 10lbs pressure (or appropriate pressure for your altitude.)
For pickling the only recipe I have calls for slicing, rather than whole peppers. You then pack pint jars to 1/2" headspace with the sliced peppers, cover with boiling pickling liquid (1:3 water to vinegar, boiled with some garlic cloves to infuse the taste) and process in a boiling water bath for 10 minutes.