Jenkins fails to run "hg" command. Mercurial is installed as /usr/local/bin/hg, Jenkins fails to find it both when given full path and when given just "hg". Outside of Jenkins it works fine.

Here's a stack trace:

Started by user vg
$ hg clone --rev default https://bitbucket.org/vgrichina/aqgridview /Users/vg/.jenkins/workspace/AQGridView-hg
ERROR: Failed to clone https://bitbucket.org/vgrichina/aqgridview
java.io.IOException: Cannot run program "hg": error=2, No such file or directory
at java.lang.ProcessBuilder.start(ProcessBuilder.java:460)
at hudson.Proc$LocalProc.<init>(Proc.java:244)
at hudson.Proc$LocalProc.<init>(Proc.java:216)
at hudson.Launcher$LocalLauncher.launch(Launcher.java:707)
at hudson.Launcher$ProcStarter.start(Launcher.java:338)
at hudson.Launcher$ProcStarter.join(Launcher.java:345)
at hudson.plugins.mercurial.MercurialSCM.clone(MercurialSCM.java:577)
at hudson.plugins.mercurial.MercurialSCM.checkout(MercurialSCM.java:422)
at hudson.model.AbstractProject.checkout(AbstractProject.java:1195)
at hudson.model.AbstractBuild$AbstractRunner.checkout(AbstractBuild.java:568)
at hudson.model.AbstractBuild$AbstractRunner.run(AbstractBuild.java:457)
at hudson.model.Run.run(Run.java:1404)
at hudson.model.FreeStyleBuild.run(FreeStyleBuild.java:46)
at hudson.model.ResourceController.execute(ResourceController.java:88)
at hudson.model.Executor.run(Executor.java:230)
Caused by: java.io.IOException: error=2, No such file or directory
at java.lang.UNIXProcess.forkAndExec(Native Method)
at java.lang.UNIXProcess.<init>(UNIXProcess.java:53)
at java.lang.ProcessImpl.start(ProcessImpl.java:91)
at java.lang.ProcessBuilder.start(ProcessBuilder.java:453)
... 14 more