Norway's center-left Labour begins coalition talks as anti-oil Greens sidelined

Norway's Labour leader Jonas Gahr Støre, second right, cheers after seeing exit poll results, in Oslo on Monday night.

(CNN)Norway's main opposition Labour Party is beginning coalition talks to form a government Tuesday after the ruling Conservatives lost their command in parliamentary elections and the anti-oil Greens failed to win enough seats to become the potential kingmaker.

Labour is likely to form an alliance with the country's Center Party and the Socialist Left Party, following an election campaign period heavily focused on the climate crisis and the future of the country's lucrative oil industry. Though it has not ruled out talks with the Greens, the only party calling for a complete end to fossil fuel exploration.
Norway is Europe's second-biggest oil-producing nation, after Russia, and the world's third-biggest natural gas exporter. Even with political will, phasing out fossil fuels was unlikely to be quick.
    But the future of fossil fuels in the country became a hot-button issue in the election period, as oil contributes significantly to the nation's wealth but sits at odds with Norway's other credentials as a global climate leader.
      The results unseat Prime Minister Erna Solberg, who after eight years of rule became Norway's longest-serving Conservative leader. Solberg has refused to put an end date on fossil fuel production, planning for its continuation beyond 2050.
      But her ouster wasn't the boon for climate some had projected. Polling ahead of the election and early results had suggested the Greens would win enough seats to force Labour to accept it in its coalition.
      Labour leader Jonas Gahr Støre, a former foreign minister, is seen generally as a pro-oil figure. His party is supporting the continued production of oil, although it has indicated new exploration should be limited.
      But after more results came in overnight, the Greens' hopes for gains had evaporated, and by Tuesday morning, the party appeared to have lost its position as an obvious member of the coalition.
      In remarks to party supporters, Støre said that he would invite leaders of "all parties who want a change" to come forward for talks.
      Labour leader Jonas Gahr Støre, center, surrounded by security guards and journalists in teh early hours of Tuesday.
      "It is natural to start with the Center Party and SV [Socialists], our preferred partners," he said, adding he would also "listen" to the Greens and Reds, another smaller socialist party.
      "In this election, the Labour Party had a goal that was more important than anything other than a new government, a change in Norway after eight years of right-wing politics and increased differences, a government based on community and justice so that it is the turn of ordinary people."
      Støre appeared to target the other key election issue of inequality over climate, saying that his government would pursue a policy for a "fairer Norway with less differences."
      He also said that his government would pursue "a fair climate policy that cuts emissions and creates jobs," and that "take the sides of ordinary people," including "young people who demand that we do everything in our power to save the Earth from the climate crisis."
      According to a full preliminary count of the vote, Labour secured some 26% of the ballots, which translates to 48 seats in the 169-seat parliament. The eurosceptic Progess Party came in third, but is an unlikely Labour ally.
      The smaller Center Party and the Socialist Left Party gained 28 and 13 seats, respectively. The Greens ended with just three seats, two more than it already had.
      The results will be made official when a final count is completed.

      A climate paradox

      The Socialists have a stronger climate agenda than Labour, so they could still have some influence over the country's future energy policies.
      Lars-Henrik Paarup Michelsen, the director of the Norwegian Climate Foundation, said Labour needed the support of at least one green party to achieve command of parliament.
      Despite the results, he said, the elections had but the climate crisis more firmly in public debate and on the government's agenda.
      "Everyone expects that climate policy will be tightened after the election," he added.
      But Fay Farstad, a senior researcher at CICERO, a Norwegian institute for interdisciplinary climate research, said the gains posted by the Center Party indicate the debate around oil is not so clear cut.
      "They support Norway's climate goals and agreements, but where they differ is on the issue on CO2 tax increases. They ran on the platform of rejecting it," she said.
      Norwegians enjoy a high standard of living by many measures, largely because of its $1.1 trillion sovereign wealth fund -- the biggest in the world -- which invests revenues from the oil industry. Its website displays a real-time value of the fund, so Norwegians can marvel at their seemingly ever-growing riches.
      The country's approach to the climate crisis has been paradoxical for some time. The oil and gas sector remains crucial for the Norwegian economy, employing 200,000 people -- between 6% and 7% of its workforce -- and accounting for 14% of GDP and 41% of exports.
      The Norwegian Petroleum Directorate said earlier this year that it expected oil production to keep rising in the next few years, from 1.7 million barrels a day in 2020 to just over 2 million a day in 2025.
      But it has also pledged to become carbon neutral by 2030, way ahead of many other rich countries. The US, UK and the EU are all hoping to achieve net zero by mid-century. The country is also offering generous subsidies for electric cars and investing heavily into renewable energy sources.
      "There have been many debates over the course of the last year and a half or two years, but when the [UN] report came in August, just as the campaign was picking up steam, it really did put climate change at the center of attention," Ole Jacob Sending, director of research at the Norwegian Institute of International Affairs think tank, told CNN.
      The UN report found that climate change was happening faster than scientists previously thought and was published as much of the Northern Hemisphere battled heatwaves, wildfires and flooding. In Norway, a country that generally experiences cooler climes, was scorched in parts by a heatwave during the summer.
      While climate change itself is not up for a debate in Norway -- all of the main political parties acknowledge climate change is real and already happening -- the question of how to handle it is.
      "Climate is now one of the main fault lines in Norwegian politics ... there are disagreements on what are the best policies and how urgent is it that we take action," Sending said.
        "It's less of an elephant in the room now ... there's an increased recognition that Norway is having a challenge."
        A previous version of this story overstated Norway's position in the world's oil production output. It has been updated to reflect Norway's place as the second-biggest producer in Europe, after Russia.