The attached graph show the oxygen content of the earth's atmosphere for the last 1 billion years, and has varied between 3% all the way up to 35%. So the nitrogen oxygen ratio has varied tremendously over the years.

According to the Gaia hypothesis, the earth's atmospheric composition is largely determined by the organisms living on our planet.

Originally, the atmosphere was thought to consist largely of methane and carbon dioxide. Ancient algae and other photosynthetic organisms (plants) used the sun's energy to split carbon dioxide, extracting carbon for their growth, and releasing oxygen into the atmosphere, increasing its content at time up to 35%! When they died, the plants became fossils such as coal, or in the case of oil filled algae, oil.

With the availability of the oxygen, new non-photosynthetic organisms evolved, first unicellular aerobic organisms that could move, and then animals like us, that would eat carbon filled plants (or other animals) and metabolize it with the now available oxygen to obtain energy (more on this later). The varying compositions of the earths atmosphere over time is a reflection of the competition between the two major kinds of living organisms, plants and animals, for domination in the earth's biosphere.

"The details on the origin of nitrogen, which exists so abundantly in the Earth's atmosphere, are missing. An attempt to give a possible answer to the question was interpreted to be the result of endothermic nuclear transmutation of carbon and oxygen atom pairs in carbonate lattice of mantle containing crust, 12C + 16O + 2e * +2ν↦2 14N + 4He, with help of electropionic attraction effect (48% shrinkage) due to the excited electron capture and neutral pion catalysis. The excited electrons were generated by rapid fracture or sliding of carbonate crystals due to volcanic earthquake, and plenty of neutrinos were derived from the universe, mainly from the young sun. The formation of nitrogen would have continued for 1.3 billion years from 2.5 to 3.8 billion years ago in the Archean era, until the active volcanism or storm of neutrinos ceased. The possible nuclear transmutation rate of nitrogen atoms could be calculated as 2.3×106 atom/s."

Since nitrogen is a relatively inert gas, it accumulated in the atmosphere. Living organism use a little bit of it in their structures, such as proteins, but not enough to use it all, as in the case of carbon.

Incidentally, the splitting of carbon dioxide into carbon and oxygen by photosynthesis is where the sun's energy is stored. So when you burn a piece of wood, you are just recombining the oxygen with the carbon, creating carbon dioxide, and simply releasing the suns ancient energy that was captured and stored long ago. Plants and animals both have mechanisms to burn carbon in a much more controlled manner rather than fire, which powers their systems to accomplish such things as movement, or thinking, as what I am doing here. This process is called metabolism, and largely occurs in mitochondria, which are ancient bacteria that cells incorporated into their structures.

Today, humans are the largest consumers of carbon, so we catalyze the recombination of carbon with oxygen, slowly shifting the balance in atmospheric gases towards less oxygen, and more carbon dioxide, with nitrogen largely staying the same. This change in atmospheric composition affects our climate, as in global warming, and eventually will determine which organism survive or perish. Something will live, of course, but it may be not us!
Source(s):
http://en.wikipedia.org/wiki/File:Sauerstoffgehalt-1000mj.svg
http://en.wikipedia.org/wiki/Gaia_hypothesis
http://answers.yahoo.com/question/index?qid=20080409043848AAHbPKV
http://adsabs.harvard.edu/abs/2004NCimC..27...99F

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