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What's this fitting and where do I get a new one? Water comes out of it only when the well pump is on. It's not a huge amount, but it's dripping down the pipe and causing the tank to rust at the entry.
It's commonly called a "snifter" and works exactly like the air valve on a tire. The presence of this indicates that you do NOT have a "captive air" tank which has a water bladder. Over time, the water will absorb the head of air in the tank. The tank needs to be periodically recharged with air.
The purpose of the snifter is so that you can use a tire pump or air compressor to inject air into the tank to recharge the air cushion that allows you to draw several gallons of water before the pump starts. If it's leaking, you may be able to replace the valve insert; it's the same as what's used in tire valves. You might want to replace the entire thing, since it looks like it's been beat up some. Check with a plumbing supply store or well service company for a replacement part; the big-box stores and hardware stores aren't likely to have it.
If your pump is short-cycling -- that is, you can only draw a little bit of water before it starts, and it stops almost right away -- you don't have enough air in the pressure tank.
After you repair or replace it, you should recharge the air in the tank. With the pump turned off, open a faucet. Using an air compressor or tire pump, put air into the snifter until air comes out of the faucet. Close the faucet, and continue adding air until the pressure gauge reads 2 PSI below the turn-on pressure of the pump. Turn on the pump and you're good to go. Note that you'll get some air out of the faucets in your house for about a day. You should recharge the tank at least annually.
P.S. -- If you don't want to mess with recharging the air in the tank, you can replace the tank with a "captive air" type tank. The idea is that you can just precharge it once (again, 2 PSI below the turn-on pressure -- the snifter is on the top of the tank). Then replace the old snifter with a plug.