We don't get much of a sense of place from "Dream Song 14." For the first two stanzas, the speaker is just talking to us. He mentions the sky and the sea, but we don't necessarily think those elements are in front of the speaker at this very moment. He seems to just be recalling the sky and the sea as examples of things that bore him.
In fact, the poem's opening words, "Life, friends, is boring," make us feel like the speaker is sitting with us, holding court. You know, the way that one friend of yours does every day at the cafeteria table during lunch. She talks, and everyone else listens. It's not so much a conversation as it is a one-woman show.
But, in the third stanza, the "tranquil hills" and "gin" do seem to be in front of the speaker. And then there's the arrival of the dog, so we must all be outside, right? But this outdoor setting isn't quite real to us. We're presented with three different natural elements at once: "mountains or sea or sky." So we get the sense that the speaker is kinda experiencing all of nature at the same time. Obviously that isn't possible, so the setting must be changeable here.
The repetition of "or" only adds to this feeling that the setting is fluid. It's almost like we're watching all of the elements of a watercolor painting melt together in the rain. Or, you know, like we're in a dream and we keep realizing we're in the middle of doing something in the backyard and then, suddenly, we're in our neighbor's kitchen eating a pizza and we have no idea how we got there. Mr. Berryman, dude, where's my car?