You can turn water into oxygen AND hydrogen in two ways.
The first method is to place the water next to IRON and apply SPRK to that IRON. Note that the water (and the resulting oxygen) will cause the iron to rust; to prevent this, you need to use GOLD in the immediate vicinity of the iron pixels that are in contact with the water.
The second method is to expose the water to ELEC, which will also split it into oxygen and hydrogen.