The supply side of your post is spot on. This demand side is weaker, though. 10% of passenger vehicles switching from 18mpg to 30mpg is not going to make the difference that a Reaganesque supply enhancement will.
When are people that demonize SUVs going to properly attack USAGE instead!? MPG is meaningless if you don't compare total CONSUMPTION.
Where is the outrage of people that CHOOSE to commute 30 miles everyday in a Honda for a government job vs. a farmer that "works at home" and produces a real product directly from fuel. Why not have a direct impact NOW rebates for gas tax on total number of gallons per month, (or whatever), to encourage conservation of total usage rather than just mileage enhancement for idiotic shopping trips.
<<< Where is the outrage of people that CHOOSE to commute 30 miles everyday in a Honda for a government job >>>
A LARGE percentage of consumption is used for electric generation...
Utilities have added tens of thousands of Diesel "Peaker" plants, instead of fighting 3 decades of lawsuits to put up a nuke or coal-fired plant....
EDUCATION is what we need. And we need to pound home the message that the bill for 30+ years of Lib enviro policies that were put off for later generations to pay is NOW DUE!
How about people buying huge 4 bedroom homes etc etc with 2 or less kids . Cost energy to heat and AC
Them politicals in a lot of cases have TWO homes
If the prices stay "high" you will begin to see people make rational decisions that affect demand a lot- car pooling or parking Yukon's and driving Geo's instead, for example. When only the very well to do and the people who actually need (rather than want)one of full-size trucks, big vans, or SUV's,are driving one, demand will go down.
When you consider the cost of living vs discretionary income (I haven't seen any recent figures) the Huntsville, AL area is one of the richest areas in the nation. The last time I was out in rush hour I saw more F-150's and Grand Cherokee's than Honda Accords coming in from 30+ miles away. It may not be as great an effect as the supply side, but there will be an effect. Every gallon voluntarily saved will have some effect. I fear price controls and gas-guzzler taxes more than I fear anything else.