High e furnaces have separate venting.
Furnace and water heater venting.
In contrast modern high efficiency condensing furnaces exhaust much cooler gasses and need only plastic pipe materials such as pvc cpvc or abs for their exhaust vents some high efficiency furnaces also include a plastic pipe for intake area and all types.
The old vent pipe is too large because it served both the furnace and water heater.
In many cases the exhaust from the larger appliance heats up the common vent improving the flow of the water heater vent.
Water heater ducts may lead directly outdoors or they may tie into a larger vent duct that also serves a gas or propane furnace or boiler in the home.
As far as sealing off the ventilation in your crawlspace very bad.
Traditional gas fired forced air furnaces produce hot combustion exhaust gasses and therefore need metal vent pipes or chimneys.
This is called a common vent configuration.
You have 3 gas burning appliances that must have a constant fresh air supply to support clean and complete combustion process.
The lower btuh of a gas water heater compared with a heating furnace or boiler will very often be unable to heat the chimney interior sufficiently to develop a draft.
The conditions explained in this post also apply to the wood burning appliances.
Gas water heater vent codes standards.
Atmospheric venting refers to a system in which exhaust from the water heater naturally rises out of the appliance s combustion chamber then travels up through a standard chimney style flue.
The photo below shows typical combined furnace water heater venting.
Consequences of improperly assembled vent pipes problematic chimney flue deteriorating chimney walls can be sometimes fatal fire and carbon.
Because of their unique construction power vent water heaters are virtually impossible to backdraft.
Many building codes mandate that once modified or changed all fuel burning appliance vents must be sized according to code.
Proper furnace water heater venting is an extremely important issue which depends on the performance of the house chimney chimney flue or other exhaust assemblies.
With a replacement high efficiency furnace the existing vent pipe does not work for water heater only because the vent is too large.
The result is a back draft of combustion products out of the water heater s draft hood and into the building.