It's already axiomatic among investors: When oil runs out, alternative energies, like solar or wind power, will help pick up the slack. But those looking to diversify their green portfolios should also keep a close eye on the next stage of clean tech investment: alternative fuels.

In recent years, a band of small- and medium-cap alternative fuel producers have emerged, prompting investors to rush into these high-risk, high-reward offerings.

But alternative energy and alternative fuels are completely different investments, fundamentally driven by two separate commodities: namely, oil and gas. And it's that distinction that holds the key to the clean fuel revolution.

Clean Energy Vs. Clean Fuel

Despite the flurry of alt-energy ETFs launched lately, most options for alternative fuel investing are still the individual companies, which tend to be high-risk, small- to medium-cap firms.

In some ways, this isn't so bad. Take the PowerShares WilderHill Clean Energy ETF (NYSE Arca: PBW), the PowerShares CleanTech Portfolio (NYSE Arca: PZD) and the First Trust NASDAQ Clean Edge Green ETF (NASDAQ: QCLN). These three ETFs - which straddle the range of small- to large-cap funds - have performed reasonably well this year (they're up between 20-25%), but they still lag the stock market as a whole. In part, they've been dragged down by under-performing sectors like solar: First Solar, a $10 billion solar power leader, has dropped 9% year-to-date, while Evergreen Solar, a smaller provider, has plunged 41%.

But the story could not be more different for synthetic fuel makers. Synthesis Energy Systems (NASDAQ: SYMX), which uses gasification technology to convert coal and coal waste into clean transportation fuels, has surged 79% year-to-date. Rentech (AMEX: RTK) has skyrocketed 240%, after recently receiving a contract to supply 1.5 million gallons a year of synthetic diesel fuel for eight U.S. carriers, including Delta Airlines and American Airlines, starting in 2012. And Syntroleum Corp (NASDAQ: SYNM), a biodiesel manufacturer, is up a whopping 430%.