The amount of energy consumed grows to match the price of bitcoins. Energy is basically the margin cost of mining, and bitcoins is the revenue. Miners will start buying more cards to mine more when the payout is higher, eventually pushing them to an equilibrium where everyone starts complaining that it is not profitable any more.
If the revenue were to drop to 1BTC per block, miners would start unplugging their machines to cut costs, and the difficulty would drop to match this change. Once you win a block, the cost to add a transaction is nearly nil, and to ignore low value transactions will mean that the next miner will be able to take them and pocket them.
So your solution is "we don't need fees" because when block reward falls 90% then hashing power will fall 90%. Except if hashing power falls 90% then Bitcoin is vulnerable to 51% attack.
It is possible for Bitcoin to have low fees. Lower than ACH, lower than VISA, lower than WU but something needs to pay for the network. If the network is vulnerable to 51% attack then the value of Bitcoin will decline relative to that risk. If it it is trivially easy/cheap to 51% attack the network then the value of Bitcoin is nothing.
Keep in mind that more's law also applies to miners, and 2 years from now all that mining equipment will be obsolete, so unless miners keep buying equipment, they will be replace by a new set of miners who will get twice the hash rate at half the cost (energy consumption probably won't drop).
Which provides no security. New attackers will have access to the same hashing power. Thus in 2 years 10TH is more like only 5TH now. If the network is 20TH it is only roughly as secure as it is today. The nominal network rate is irrelevant. What matter is the cost of an attack. Today 10TH is prohibitively expensive. In 60 years the Iphone 87 may have 20TH/s of computational power. Moore's law can't make Bitcoin "stronger" because both defenders and attackers have access to the same powerful new gear.
Unless some miners get 50% of the hashing power (or some cartel forms), market laws will apply, and the cost to add a transaction will be the limit to the actual required fee. All that power consumption and fancy graphics cards will end up being sunk cost at the point of transaction recording, and thus be irrelevant.
Didn't you say that due to more efficient gear miners will be forced to either turn off rigs or upgrade them. Equipment has a finite lifespan both physically and economically. The equipment cost can be computed per hash by block by taking blocks of effective lifespan divided by the equipment cost adjusted for the time value of money.
