Increased efficiency doesn't lead to less energy use, it leads to greater wealth for the same energy use.

This old economist's saw seems true over time, but in the short-term (the next critical 5 - 10 years) increased efficiency will likely be used to keep energy expenditures down, since the question isn't saving money because of efficiency/conservation, but rather losing less money because of rising energy/resource prices. So the consumer's goal is to lose less. This is an important psychological difference (which I might have explained in an unclear way). As energy & resource prices rise many activities don't make economic sense like they once did. Demand destruction occurs, corrects the market increase until a later day when it comes back... But demand destruction isn't happening in China because of the subsidies there, or in the Middle East for the same reasons.

"Supply and demand imbalances" aren't per se the reason for demand destruction is, as we see in the case of subsidies. It's price, especially price's cumulative effects over time, which destroy demand. Again the difference is important when you consider subsidies.