Gas has been mainly displacing coal in electricity generation and not much oil for the simple reason that oil provides about 1% of America's electricity and that number is declining. There is not a lot of oil to displace in the electricity industry, but FPL, Florida's biggest electric utility, is an exception.
Oil accounts for 15% of FPL's generation capacity and 4% of its electric generation, but FPL is aggressively switching its oil generation to gas, as a result of low gas prices, to the considerable benefit of the environment and consumers. FPL still has a monopoly on electricity generation so it collects from its customers every single dollar it spends on fuel to generate electricity. Low natural gas prices will cut by an incredible $460 million the fuel costs collected from consumers just in 2012.
Instead of paying for fuel, that is $460 million of stimulus to the Florida economy that is freed for investing in clothes, food, school books, efficient lighting--all manner of things. A typical FPL customer will save $4.53 per month as a result of the fuel cost reductions.
Low natural gas prices are also good news for the environment and our oil import imbalance, because FPL is in the process of replacing dirty, old big oil-fired power plants with modern, efficient clean natural gas generation. It has already demolished 2 big oil burners, is building two 1250 MW new gas plants that will begin operations in 2013 and 2014, and might do the same at a third facility. The switch will slash air emissions, including carbon pollution.
Switching from oil to gas has also the important benefit of reducing oil imports, as still about 50% of all oil consumed is imported. The US does not fight wars for natural gas or ethanol or biodiesel, but expends as much as one-third of its military budget to protect oil shipments from the Middle East.
Next Era is the parent company of FPL and is one of the nation's biggest renewable energy companies, with massive investments in wind and solar power. Next Era understands that the next era in power generation will be led by gas and renewable energy.