If Gas is present on a space, it lowers the hitpoints of tiles and ground units in that space by 1 (down to 1), making them more vulnerable to damage.
In the Decay phase, Gas deals 3 shots of 1 damage to ground units in an indiscriminate damage step. After this damage is dealt, all spaces with Gas lose 1 Gas. Spaces that had 2 Gas cause surrounding spaces to gain 1 Gas, but gas gained this way cannot cause a tile to have more than 1 gas. Lastly, the Humidity of spaces that still have Gas drops by 1.
In most cases, this means that gas from a destroyed building or zeppelin only affects a single tile for 1 turn. Gas dropped from a zeppelin will start in a single tile on the turn it is dropped, spread to a 3x3 grid in the second turn and disappears after that.