BCL
Engineer
It's possible to buy taxed on-road diesel and get a refund of fuel taxes.Government agencies are usually sales tax exempt, and there are provisions for non highway use of diesel since the highway use tax provisions normally don't apply.
http://www.journalofaccountancy.com/issues/2011/mar/20103438.html
The Disneyland Railroad uses biodiesel extracted from their own restaurants. However, it's B98, and I've heard they don't bother getting anything except regular taxed diesel.