Some of the links on this forum allow SMF, at no cost to you, to earn a small commission when you click through and make a purchase. Let me know if you have any questions about this.
Yes you can wrap them in a foil pouch with some holes punched in it. Don't bother soaking chips. I find that chunks work better and flare up a lot less. I don't understand why you would want to put wood chips in your water pan??? What kind of smoker do you have?
Ok I see you have a masterbuilt propane smoker. From what I have seen on here from other folks that have these smokers it is very easy to burn up a heck of a lot of wood. Make sure that your top vent is always fully open and control your heat with the control not the top vent. Experiment with placement of the chips for a little while and you can make a foil pouch just like if you were steaming up some vegetables. make it kind of loose but sealed well and then punch some holes in it. this limits the amount of air getting to the smoldering chips so that you get thin blue smoke. You want thin blue smoke. If the smoke is billowy white or worse, brown you are doing it wrong. I hope this helps. timber