Iron gas pipe through wall- sheathing material

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Hi there, this is my first post ever on this forum, and I couldn't find any rules sticky, so I'm just gonna be respectful and follow typical forum ettiquette :)

I have just bought my first home, and I have black iron pipe coming from my meter, running through the dirt, underneath my brick fascia, through a noth in the top of my cinder block wall. Smelled a leak and had gas company swing by and check, sure enough the pipe is pitted and leaking somewhere in the dirt.

Relevant Photos

I was advised not to touch it or anything, and to do a new run through my band joist, which requires going through the brick fascia.

In the photos, right below and to the right of the meter, there was already an 'X' marked on the fascia in a spot that (according to my measurements) would be perfect to run pipe through.

I plan on drilling a hole in the brick & band joist, running new galvanized pipe there, then re-doing the rest of the iron pipe in my basement (furnace, water heater, and dryer). Basement is unfinished and wide open, so that part should be (relatively) easy!

My questions for all of you experienced minds are:
1. Should I used galvanized pipe outside?? Read on here "don't do it because flaking will clog your appliances and valves" but I thought you had to use galvanized outdoors. I think its also okay to paint iron pipe, but I would prefer not to have to paint everything if I don't have to.
2. What should I use to sheath the pipe? I struggled to find an answer here, but it seems like copper, iron, or PVC are all options. Regardless of what I go with, how much bigger should my sheath be than my gas pipe? The gas pipe is 1", but inside my house its immediately split off to 1/2" for my furnace and 1/2" for my water heater. (I don't have the dryer yet, but I was planning on installing a T with another 1/2" pipe for that)

Just trying to update my home so it is safe and up to code (michigan, usa)!
Thank you!
 
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