HT Staff
RBC | Over 100 oil and gas wells in Rio Blanco County, owned by KT Resources, are about to land on Colorado’s orphan well list, according to an article from the Colorado Sun. These wells—most of them on federal land—haven’t been producing for years and come with a hefty list of environmental violations. Now, state regulators are stepping in to hold the company accountable.
What’s Happening with KT Resources?
Colorado’s Energy and Carbon Management Commission (ECMC) is cracking down on KT Resources, a Highlands Ranch-based company that owns these neglected wells. Regulators are pushing to revoke the company’s operating rights and seize $317,000 in bonds.
KT Resources acquired these wells in 2022, but the problems go back much further. Originally drilled decades ago, the wells have been shuffled between companies like Koch Exploration and 31 Operating. Despite new financial rules requiring well operators to have enough money set aside for cleanup, KT Resources hasn’t held up its end of the deal.
In just two years, the company racked up 24 violation notices—everything from leaking tanks to soil erosion—while failing to address these issues. To make matters worse, they missed a required $77,500 financial payment in 2024.
Why It Matters for Rio Blanco County
The wells in question, scattered across Rio Blanco County’s rugged landscapes, are more than just an eyesore. Some sit in high-priority black bear habitats, and their neglect threatens both wildlife and the environment. If the state takes control of these wells, they’ll be added to the orphan well program, which has ballooned in recent years.
As of 2024, the state is already dealing with 960 orphan wells, up from just 215 in 2020. The associated cleanup sites—things like waste pits and damaged land—have skyrocketed too, from 454 to over 1,700. The cost? An estimated $1.8 billion to address over 20,000 at-risk wells across Colorado, according to environmental watchdog Carbon Tracker.
Why Did This Happen?
Here’s the crux of the issue: when big oil operators are done with old wells, they often pass them off to smaller, underfunded companies like KT Resources. It’s a legal way to shift the burden of cleanup onto someone else—or, in cases like this, onto the state.
Colorado tried to get ahead of the problem in 2022 with tougher financial assurance rules. These regulations require operators to post more money upfront for well plugging and even charge a $115 fee per well to fund the orphan program. While the rules are a step in the right direction, they came too late for many wells, including KT’s, which were transferred before the new safeguards were in place.
The Bigger Picture
In Rio Blanco County, many of these wells haven’t produced anything since 2020, and only three of KT Resources’ 107 wells were reported active in 2024. Yet, they continue to pose environmental and financial risks.
Critics say the new rules, while better, still have loopholes. Operators can spread their payments out over 20 years, but what happens if the company goes under long before then? KT Resources is already proving this point, and environmentalists warn it’s a sign of more trouble to come.
What’s Next?
State regulators are pushing to add KT’s wells to the orphan list and hold the company accountable, but the underlying issue remains: there’s not enough money in the system to deal with the scale of the problem.
