Is Santa Claus Canadian?
According to the Canadian government, yes.
Last week, Canada claimed the North Pole is under its jurisdiction, damaging relations with Russia and kicking off a new "Cold War."
But this new Cold War isn't over elves, toys, or reindeer. It's over billions of gallons of crude oil and trillions of square feet of natural gas trapped under ice and frozen bedrock.
And the dispute has quickly escalated into one of the biggest geopolitical standoffs of the year.
As Money Morning Global Energy Strategist Dr. Kent Moors recently told investors, "All hell is breaking loose" in the Arctic Circle.
The Arctic Circle likely holds 15% of the world's undiscovered oil and 30% of its undiscovered natural gas. This represents trillions of dollars in national wealth to whomever has the territorial rights to the bonanza.
With global oil and gas demand on the rise, and drilling technologies making production in extreme conditions more viable, the Arctic – and the North Pole – are up for grabs, leading Canada to approach the United Nations for new authorization.
This battle could give us some of the best investments of 2014 – if investors get in now, before the geopolitical battle escalates.
The Arctic Oil Standoff Begins
The battle began six years ago when Russia planted its nation's flag by submarine in frozen waters in an effort to claim two-thirds of the subsea Arctic. Norway, Denmark, Canada, the United States, and several other countries with Arctic borders all disputed Russia's claim.
For the most part, the issue was overshadowed by other regional disputes around the world. But last week, Canada decided to fight back, causing a stir in both hemispheres.
On Dec. 9, Canada's Foreign Minister John Baird announced that the North Pole and a number of claims off its continental shelf belong to Canada.
The government has now ordered scientists to provide data backing up its claims. The nation plans to use this data to make a formal submission to the United Nations under the U.N. Convention on the Law of the Sea treaty to extend its international borders to certain areas of the Atlantic Ocean and the Arctic Circle. This includes 656,000 miles of seafloor.
The international treaty mandates that nations prove their new claims fall within 230 miles of their continental shelf. Prior to the announcement, Canada recently applied to increase its nautical borders by approximately 1.2 million square kilometers beyond its current boundaries, citing studies of its continental shelf's reach.
The treaty's vagueness means that nations in the Arctic can make claims past the 230-mile cutoff due to odd angles of the continental slope or thickness of the seafloor.
While claiming the North Pole is a long shot, that didn't stop the story from escalating…