A kilogram is a unit of weight. So a kilogram of bricks would weigh the same as a kilogram of feathers despite if its in water or air since weight is determined by gravity in relation to mass and not what substance the object is in.
Most of the excess energy is released as waste heat into the air surrounding the engine. Small amounts of excess energy are also released as sound energy, and as electrical energy generated by the alternator in a car's engine.