A lot of demand destruction can happen even without prices rising. The physical supply is important. Look at the US manufacturing. It is the only sector of economy that has really diminished its energy usage - enabling the rest to use much more. It is not only higher energy efficiency but diminishing investments. Industrial investments have a long life span - 20 - 30 years at least. They demand a lot of electricity. Where do you take more of that from 20 -30 years from now? More natural gas? No way. Coal? Maybe, but not without problems. Take steel making. The energy is all important here, not so much wages. The Chinese can increase their steel production because they have been able to increase their coal production by 7 - 10% a year - this means more electricity, more coke.

And Jevons had it right: increasing energy efficiency does not spell conservation. And rising energy costs don't spell increasing efficiency. Increasing efficiency spells investments - or scrapping capacity. In an energy crunch (and in an economic depression) all production capacity can no more be used and then the most energy consuming will be closed first. This will increase the average efficiency.

If the crisis is sudden a lot of energy will lost in started but abandoned investment and construction projects. Former Soviet Union is full of abandoned building sites. A lot of energy was used to produce those now crumbling concrete blocks. That's how it happens.

In the long run the efficiency starts decreasing because the existing capacity will be run longer, maintenance is neglected etc. This applies also to cars. People will not change to newer cars with more mpg. They just drive longer with the old ones with less maintenance. Look at Cuba. All this has happened in countries where there has been an energy crisis.

I understand that most people in the US has never seen or experienced a real energy crisis. The Europeans experienced it during the WWII. In Eastern Europe they experienced it some years ago (and in many countries it is not over). You have never seen people sitting on roadside with a small bottle and a sign: "Want to buy gas for motorcycle" or a tanker selling black market diesel on a parking lot. There are first hand empirical data on the effects of an oil crisis. We do know something about what will happen. The bad news is that it is not nice. The good news is that you adapt and survive.