Fair point. I couldn’t find (just now) the original source for the term “demand destruction” (although it seems that it may have come from the peak oil crowd), which I presume was derived from the strict understanding of “supply and demand.” But what you’re saying is that demand – or perhaps, desire – hasn’t been destroyed, just people’s ability to afford to pay for it. So if I’m not mistaken, a more clear understanding of the situation and terminology would be “affordability destruction.”
But although some people do make retrofits as a response, many others remain in denial and/or expect the “good times” of cheap prices to return. As just one example, sales of gas guzzling vehicles have recently increased as a result of cheap oil and gas prices.
As well, I’m not so sure about the notion that “‘Peak oil’ happens when oil is expensive enough that alternatives are cheaper.” Never mind that this assumes a transition from one energy source (oil and other fossil fuels) to another (“renewables”), or that higher oil prices may translate into higher prices for the construction of alternative energy sources and so lessen any price advantage, but I think peak oil has more to do with extraction rates that are determined not by what people are willing to pay, but what they’re able to pay. That is, I don’t think people will overwhelmingly use less oil because they choose to use alternatives, but rather, because they can’t afford to pay for it in the first place. (This would all be an outcrop of decreasing EROEI levels, which I take it you’re familiar with.)
About the Deutsche Bank report you mention, I think they got #1 right, but lose it with #2. Seems like a bit of a techno/cornucopian/optimistic view of how things work, derived from an extrapolation of how things have worked, on to the assumption that they will continue to work in such a way in the future (if not in perpetuity). To make just one point, if people can’t afford the high price of oil, how would they be able to afford something else instead?
And about us following the Deutsche Bank model “precisely,” from what I’ve read, alternative sources of energy have not even been outpacing growth, and so have yet to cut into fossil fuel use. You might say that they’ve actually been allowing for growth to continue. Perhaps their growth curve will grow exponentially and allow for a “switch” to occur (i.e. they outpace growth), but I don’t see it happening as I don’t think alternatives can become cheaper than the “free” subsidies of fossil fuels. While alternatives can be useful for some time, they’re not a replacement, and at best can assist us on the down-slope and in a bit of de-centralization.