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On Friday, leading U.S. coal producer Alpha Natural Resources announced plans to reduce coal production by 4 million tons through early 2013. The reduction will most impact CSX Transportation’s coal traffic, causing about a 2 percent drop in year-over-year tonnage, and minimally impact Norfolk Southern Corp.’s traffic, according to a report issued yesterday by Robert W. Baird & Co. Inc. About 80 percent of Alpha Natural Resources’ volume originates on CSXT.

Overall, Baird analysts expect CSXT’s coal traffic to decline 4 percent this year, which is “roughly in line with a 5 percent reduction in eastern U.S. coal production,” the report states.

The Appalachian coal production cuts announced by Alpha Natural Resources reflect the impacts from natural gas switching, low natural gas prices and warm winter weather, which have formed a near-term headwind to domestic coal demand, Baird analysts wrote.

Natural gas prices below $3 could cause some incremental coal-to-natural gas switching in Powder River Basin-served western utilities, although energy reliability issues and long-term coal contracts likely will limit switches, they wrote.

In terms of coal exports, Peabody Energy — the nation’s largest coal producer — expects modest export demand growth in 2012, the report states. Longer term, Arch Coal officials believe U.S. port expansions support a doubling of the nation’s coal export capacity by 2015 due to constrained export growth potential among traditional supply sources, such as Indonesia, South Africa and Russia, Baird analysts wrote.