There are a number of issues that must be considered here.

Gas water heaters have a slightly higher recovery rate than do their electric counterparts so the first consideration is whether your present electric water heater meets your demand needs. (For identical sized units typically gas will produce about 10% more hot water per hour.)

Next you must consider the location of the water heater. There are no restrictions on where an electric water heater may be installed other than to say it must remain immediately accessible for service.

A gas water heater may not be installed in any bathroom, bedroom or any room which opens directly into a bathroom or bedroom.

When a gas water heater is installed in any room that would be classified as a "Confined Space" we must provide vent openings to an unconfined space or to the outdoors to supply combustion air. A confined space is any space that is less than 50cu.ft for each 1000BTU/hr of the burner. Typically a 60gal. gas water heater would have a 38K BTU/hr burner so a confined space would then be any room that has less than 38BTU/hr x 50cu.ft = 1,900cu.ft. Allowing an 8' ceiling a confined space would be any room less than 15.4' x 15.4' or equivalent. (237.5sq.ft).

Due to the extremely low working pressure of Natural Gas lines the sizing of gas lines is critical. The mere presence of a gas line near the water heater location does not insure that the line has enough capacity to assume the additional load of a water heater.

A power vented water heater may vent through the wall but a conventional gravity vent system must terminate a minimum of 5' higher than the top of the water heater draft hood but it may not terminate within 8' of any vertical surface. (Very Few people would want an 8' vent pipe sticking out the side of the house so the option is to install a vertical riser to a point 2' above the roof line. (In regions subject to snow 2' above the average snowfall depth.)

Most water heaters are labelled with an anticipated energy consumption figure. To determine your cost efficiency first determine the estimated operating cost (converted to actual energy or fuel cost in your region) and multiply the annual savings by 10 years which is the average life expectancy of the unit. You can then compare the energy savings to the installation cost to determine the practicality of switching from electric to gas.

Good info...Thank you. Here are my reply's:
First, the recover rate is important because I have 4 kids. I'd say I would benefit from the gas.
Second, the water heater is in a utility room in the basement. So no bathrooms or such.
Third, ahh, the room is large but I don't think it would quite make the 237.5 sq. ft. Might be close. It's not a totally confined space. It vents to another closet. Would that mean my gas furnace isn't to code now? It's in the same room.
Fourth, the main gas supply line comes into that room so no problems there. It can be reduced however need be.
Fifth, I was most likely going with a power vent. I think then it's just 4" pvc out of the house. It's a 5 ft. run. Should be straight forward.

I was about to suggest what you said in the Fifth consideration. That would give you the best of both worlds. Not to mention that you can actually DIY the whole way. If you are capable of the electrical hook-up  and I am guessing you really are  the gas is not a big deal.

Close attention to following manufacturerÂs instructions will produce a professional installation. Your inspector can help.

Pinoke

You are correct, when using the mathematical formula for determining whether the space is a confined or unconfined space we must first total the BTU's of all combustion devices in the space in question by example, a furnace will typically range from 50K to 200K BTU so for illustration let us assume 100K/BTU for the furnace plus 38K/BTU for the water heater for a combined total of 138K/BTU. In this case a confined space would be any room less than 138K/btu x 50Cu.ft/kBTU = 6900cu.ft. Again allowing an 8' ceiling we divide 6900/8 = 862.5sq.ft. This means any room with less than 862.5sq.ft would be considered a confined space. We could then use the square root of 862.5 to get an estimate of the required room size which would be 29.36' x 29.36'.

From this illustration we can see that a typical unfinished full basement would meet the requirements of an unconfined space but if the furnace and water heater are then enclosed in a utility room within the basement that enclosure would probably be a confined space.

The codes then offer numerous options for venting a confined space.

If the total basement area would meet the dimension as an unconfined space we could then install vent grilles through the partitioning wall from the utility room to the remainder of the basement. Code would require two grilles, one within 12" of the ceiling and the second within 12" of the floor and each grille would be required to have 1sq.in. for each 1K BTU but not less than 100sq.in. In this example we would need grilles that provide 138sq.in. 11.7" x 11.7" therefore you could install two 12" x 12" grilles or you could install a louvered door between the utility room and the basement.

Another option would be to install fresh air intake grilles through the outside wall. In this case you need 1sq.in for each 4K/BTU. 138K / 4 = 34.5sq.in. A 7" round duct has a cross sectional area of 38.48sq.in so one 7" round duct from the utility room to outside air would provide the necessary combustion air.

There are a number of other options as well, such as venting combustion air from the attic space.

While i offer these figures as an example it must also be understood that the actual code requirements can vary dramatically from one jurisdiction to another so you would need to check your local codes.

If you are installing a power vent water heater most of them have a provision for directly ducting in the combustion air as well so you would not need to be concerned with the formulas for that type of water heater.

I would also agree wholeheartedly with Pinoke. Some jurisdictions do not permit a homeowner to make any gas connections but if it is permitted in your jurisdiction a connection such as you propose would be a straight forward job and should not be beyond the ability of a skilled DIY'er. There are some code requirements that you must be aware of, but they are not at all difficult.