git-hg cannot find mercurial module >= 4.6

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When I run git-hg clone I get the error message:

Could not find a python interpreter with the mercurial module >= 4.6 available. Please use the 'PYTHON' environment variable to specify the interpreter to use.

I have a PYTHON environment variable enter image description here

And the same thing exists in PATH.

What is it looking for?

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