You can find palm oil in just about every type of product—hand soap, lipstick, cookies, supplements, peanut butter. It's even being used as biofuel. The relatively cheap commodity is noted for its stellar nutritional profile (similar to olive oil) and its lack of flavor and smell, allowing it to blend seamlessly into multiple applications. However, although it was once hailed as the future of "sustainable energy," palm oil is actually unsustainable and an absolute eco-nightmare, conservationists say.  

"The rainforest in Indonesia is in flames and palm is one of the leading reasons," said Chris Wille, chief of sustainable agriculture for the New York City-based Rainforest Alliance, a non-governmental organization working to preserve biodiverse land areas. "This is a terrifically biodiverse and super important rainforest area, and they [palm producers] are just pushing it aside to plant this stuff."

Palm oil plantationExperts estimate nearly 2 million hectares of Indonesian rainforest are cleared each year for palm plantations. The palm industry saw a boom as consumers began avoiding trans fats. Manufacturers scrambled to find an alternative to hydrogenated oils, and palm oil became the solution, said Mark Murphy, assistant vice president of corporate affairs for Cargill, the largest United States importer of palm oil from Southeast Asia and the Pacific. Today, it’s biofuel opportunities that are driving up the oil’s value and leading to expanding plantations.

Approximately 85 percent of palm exports come from Indonesia and Malaysia. While total exports of palm and palm products increased by only 2.8 percent in Malaysia, total export earnings in the country  jumped 20 percent in 2010, to $20 billion, said Sundram Kalyana, deputy CEO and director of science and environment for the Malaysian Palm Council, an organization devoted to marketing and promoting palm oil.  

To further bolster the already thriving industry, the Indonesian and Malaysian ministers responsible for palm oil production traveled to Washington, D.C., last week to meet with top environment and agriculture cabinet officials, including Agriculture Secretary Tom Vilsack and Energy Secretary Stephen Chu. Environmental advocates were up in arms over what they speculated were meetings to encourage the U.S. government to promote palm oil imports.

"Palm oil is the only oil that could make regular petroleum look green," said Glen Hurowitz, a consultant for Climate Advisers, a firm specializing in U.S. climate change policy. "The ministers are likely to push Obama administration officials to declare palm oil 'carbon neutral' despite the immense amount of greenhouse gases emitted in its production."