Answer:
The argument about the chemical and physical changes in the energy is correct.
This is so because when a log is burnt, the chemical change occurs as wood releases energy in the form of carbon dioxide are formed which is irreversible while the changes in energy of movement of the pendulum is a physical change as its potential energy converts to kinetic and kinetic energy again converts to the potential which is a reversible process.
Hence, the argument saying the changes in energy occurring on a pendulum and log is right.