The first part is technically true but kind of irrelevant. The fossil fuels are already there. It may have taken energy to get them there but, thanks to the generosity of the sun over many millions of years, it is not energy that we supplied.
The point about finding, extracting, etc. is true…But I assume this is only a fraction, perhaps not even that large a fraction, of the energy they produce. If this were not the case then it would indeed be sort of useless to use them.
So, for the reasons that people have pointed out, TVAA, the question of whether it takes more fossil fuels for us to produce ethanol than are saved through its use is a very relevant one. (Note that it is not obvious from basic physical principles that it necessarily will since the sun is also being used in the production of ethanol…i.e., fossil fuels are not the only form of energy going into the production of the ethanol.) I don’t know what the answer is but if the economist’s claim is correct, and this is what he meant (i.e., that he was doing all the accounting correctly) then it is indeed pretty damning.
Note, the production of hydrogen also takes more energy than it produces. However, one can still incur advantages if one is able to use hydrogen to effectively store energy because it might be a lot easier to produce energy to produce the hydrogen cleanly (through solar or wind or at least through fossil fuels with good air pollution abatement technology) than it is to produce the energy in an internal combustion engine. [By “produce energy”, we of course mean converting it, e.g., from chemical potential energy to mechanical energy since you don’t technically produce energy but merely convert it from one form to another. Here, we get into the problem of linguistics where people use the term “energy” in different senses.]