Ok, this past weekend, I bumped the vent pipe for my HW Heater and burned the back of my hand. I was surprised how hot this was.

The only way I know how to "insulate" the pipe is to install a double wall pipe, thus providing the air gap. I really don't want to mess with the mortar and the chimney. I don't know if other options like a foil wrap are feasible due to the high temps.