After some thought...I did read this post when it first came out....I can only conclude that your "engineer" is (to put it nicely) out of his depth, and uninformed. I'd look to the project manager, inspector, etc. to rein this college boy in!

That said, I would suggest that the presence of oxygen MIGHT lead to a very hot fire, so his concern ought to be on sealing penetrations.

Finally, you might very well be in a position where you, not he, is the defined expert. That is a matter of local contracting law.....can he pull a permit, sign off on electrical prints, etc? Does he belong to the NFPA, IAEI, etc? Has he passed any competency exams (and I DON'T mean the PE test)? Just where, pray tell, did he get his code expertise?
At the minimum, call him on his assertions, and have him show you where the requirements come from. If it's just something he "wants," well, that's what change orders are for!