diff --git a/.air.toml b/.air.toml
index 8491d61..f9d6ad7 100644
--- a/.air.toml
+++ b/.air.toml
@@ -2,6 +2,9 @@ root = "."
 testdata_dir = "testdata"
 tmp_dir = "tmp"
 
+[env]
+file = ".env"
+
 [build]
   args_bin = ["-log-level=DEBUG"]
   bin = "./tmp/main"
diff --git a/.env.template b/.env.template
new file mode 100644
index 0000000..8538c2e
--- /dev/null
+++ b/.env.template
@@ -0,0 +1,4 @@
+export PULLEY_DATABASE_URI=postgres://pulley:passwd@localhost:5434/pulley
+export PULLEY_PORT=5002
+export PULLEY_LOG_LEVEL="debug"
+
diff --git a/.gitignore b/.gitignore
index 120a0ee..2f3b2bc 100644
--- a/.gitignore
+++ b/.gitignore
@@ -21,6 +21,7 @@
 # Go workspace file
 go.work
 
+# local environment setup 
 tmp/
-
 .pg_data/
+.env
diff --git a/.local.profile b/.local.profile
deleted file mode 100644
index dc263d6..0000000
--- a/.local.profile
+++ /dev/null
@@ -1,5 +0,0 @@
-export PG_DATABASE=pulley
-export PG_USER=pulley
-export PG_PASSWD=passwd
-export PG_URI=postgres://pulley:passwd@localhost:5434/pulley
-
diff --git a/cmd/api/handlers.go b/cmd/api/handlers.go
index 2ec7ee2..c17b112 100644
--- a/cmd/api/handlers.go
+++ b/cmd/api/handlers.go
@@ -100,7 +100,7 @@ func (app *application) healthCheckHandler(w http.ResponseWriter, r *http.Reques
 	env := envelope{
 		"status": "available",
 		"system_info": map[string]string{
-			"environment": app.config.env,
+			"environment": app.config.Env,
 			"version":     Version,
 		},
 	}
diff --git a/cmd/api/handlers_test.go b/cmd/api/handlers_test.go
index 6050ad0..7a11338 100644
--- a/cmd/api/handlers_test.go
+++ b/cmd/api/handlers_test.go
@@ -12,10 +12,11 @@ import (
 	"testing"
 
 	"git.runcible.io/learning/pulley/internal/assert"
+	"git.runcible.io/learning/pulley/internal/config"
 )
 
 func newTestApplication() application {
-	cfg := config{env: "test"}
+	cfg := config.ServiceConfig{Env: "test"}
 	return application{config: cfg, logger: slog.New(slog.NewTextHandler(io.Discard, nil))}
 
 }
diff --git a/cmd/api/main.go b/cmd/api/main.go
index f7cf781..9b8f581 100644
--- a/cmd/api/main.go
+++ b/cmd/api/main.go
@@ -3,7 +3,8 @@ package main
 import (
 	"context"
 	"errors"
-	"flag"
+
+	// "flag"
 	"fmt"
 	"io"
 	"log/slog"
@@ -13,40 +14,73 @@ import (
 	"syscall"
 	"time"
 
+	"git.runcible.io/learning/pulley/internal/config"
 	"git.runcible.io/learning/pulley/internal/logging"
+	"github.com/jackc/pgx/v5/pgxpool"
 )
 
 const Version = "1.0.0"
 
-type config struct {
-	port     int
-	env      string
-	logLevel string
-}
+//type config struct {
+//	port     int
+//	env      string
+//	logLevel string
+//}
 
 type application struct {
-	config config
+	config config.ServiceConfig
 	logger *slog.Logger
 }
 
 func run(ctx context.Context, w io.Writer, args []string) error {
-	var cfg config
+	//	var cfg config
+
+	//	flagSet := flag.NewFlagSet(args[0], flag.ExitOnError)
+
+	//	flagSet.IntVar(&cfg.port, "port", 5002, "API server port")
+	//	flagSet.StringVar(&cfg.env, "env", "development", "Environment (development|staging|production)")
+	//	flagSet.StringVar(&cfg.logLevel, "log-level", "INFO", "Logging Level (INFO|DEBUG|WARN|ERROR)")
+
+	//	if err := flagSet.Parse(args[1:]); err != nil {
+	//		return err
+	//	}
+
+	cfg := config.GetServiceConfig()
+
+	logger := logging.InitLogging(cfg.LogLevel, w, true)
+
+	signalCtx, stop := signal.NotifyContext(ctx, syscall.SIGTERM, syscall.SIGINT)
+	defer func() {
+		slog.Info("Calling signal watcher stop.")
+		stop()
+	}()
 
-	flagSet := flag.NewFlagSet(args[0], flag.ExitOnError)
+	// appCtx is a context that can be programatically called to initiate the shutdown process
+	// it inherits from signalCtx which will stop on receipt of an OS signal. You can think of
+	// appCtx as responding to internal signals in the app, and signalCtx as responding to
+	// external signals sent to the app.
+	appCtx, cancel := context.WithCancel(signalCtx)
+	defer cancel()
 
-	flagSet.IntVar(&cfg.port, "port", 5002, "API server port")
-	flagSet.StringVar(&cfg.env, "env", "development", "Environment (development|staging|production)")
-	flagSet.StringVar(&cfg.logLevel, "log-level", "INFO", "Logging Level (INFO|DEBUG|WARN|ERROR)")
+	pool, err := pgxpool.New(appCtx, cfg.DatabaseUri)
+	if err != nil {
+		slog.Error("Error encountered in creating pgx postgres connection pool", "error", err.Error())
+		return err
+	}
+	defer func() {
+		slog.Info("Closing database connection pool")
+		pool.Close()
+	}()
 
-	if err := flagSet.Parse(args[1:]); err != nil {
+	if err := pool.Ping(appCtx); err != nil {
+		slog.Error("Error in attempting first postgres database connection")
 		return err
 	}
 
-	logger := logging.InitLogging(cfg.logLevel, w, true)
 	app := application{config: cfg, logger: logger}
 
 	srv := &http.Server{
-		Addr:           fmt.Sprintf("%s:%d", "0.0.0.0", app.config.port),
+		Addr:           fmt.Sprintf("%s:%d", "0.0.0.0", app.config.Port),
 		ErrorLog:       slog.NewLogLogger(app.logger.Handler(), slog.LevelError),
 		IdleTimeout:    time.Minute,
 		ReadTimeout:    5 * time.Second,
@@ -70,12 +104,17 @@ func run(ctx context.Context, w io.Writer, args []string) error {
 	}()
 
 	// Handle graceful shutdown
-	sigChan := make(chan os.Signal, 1)
-	signal.Notify(sigChan, syscall.SIGINT, syscall.SIGTERM)
+
+	// This was an older way to do it before 1.16. Now we can use signal.NotifyContext
+	// sigChan := make(chan os.Signal, 1)
+	// signal.Notify(sigChan, syscall.SIGINT, syscall.SIGTERM)
 	// Block until signal is received
-	<-sigChan
+	//<-sigChan
+
+	<-appCtx.Done()
 
-	shutdownCtx, shutdownRelease := context.WithTimeout(ctx, 10*time.Second)
+	// We don't want to inherit from appCtx because it has already been canceled at this point
+	shutdownCtx, shutdownRelease := context.WithTimeout(context.Background(), 10*time.Second)
 	defer shutdownRelease()
 
 	if err := srv.Shutdown(shutdownCtx); err != nil {
diff --git a/go.mod b/go.mod
index 4e1eb6a..0ada839 100644
--- a/go.mod
+++ b/go.mod
@@ -3,3 +3,14 @@ module git.runcible.io/learning/pulley
 go 1.24.1
 
 require github.com/julienschmidt/httprouter v1.3.0
+
+require (
+	github.com/jackc/pgpassfile v1.0.0 // indirect
+	github.com/jackc/pgservicefile v0.0.0-20240606120523-5a60cdf6a761 // indirect
+	github.com/jackc/pgx/v5 v5.7.5 // indirect
+	github.com/jackc/puddle/v2 v2.2.2 // indirect
+	github.com/kelseyhightower/envconfig v1.4.0 // indirect
+	golang.org/x/crypto v0.37.0 // indirect
+	golang.org/x/sync v0.13.0 // indirect
+	golang.org/x/text v0.24.0 // indirect
+)
diff --git a/go.sum b/go.sum
index 096c54e..74f1c13 100644
--- a/go.sum
+++ b/go.sum
@@ -1,2 +1,25 @@
+github.com/davecgh/go-spew v1.1.0/go.mod h1:J7Y8YcW2NihsgmVo/mv3lAwl/skON4iLHjSsI+c5H38=
+github.com/jackc/pgpassfile v1.0.0 h1:/6Hmqy13Ss2zCq62VdNG8tM1wchn8zjSGOBJ6icpsIM=
+github.com/jackc/pgpassfile v1.0.0/go.mod h1:CEx0iS5ambNFdcRtxPj5JhEz+xB6uRky5eyVu/W2HEg=
+github.com/jackc/pgservicefile v0.0.0-20240606120523-5a60cdf6a761 h1:iCEnooe7UlwOQYpKFhBabPMi4aNAfoODPEFNiAnClxo=
+github.com/jackc/pgservicefile v0.0.0-20240606120523-5a60cdf6a761/go.mod h1:5TJZWKEWniPve33vlWYSoGYefn3gLQRzjfDlhSJ9ZKM=
+github.com/jackc/pgx/v5 v5.7.5 h1:JHGfMnQY+IEtGM63d+NGMjoRpysB2JBwDr5fsngwmJs=
+github.com/jackc/pgx/v5 v5.7.5/go.mod h1:aruU7o91Tc2q2cFp5h4uP3f6ztExVpyVv88Xl/8Vl8M=
+github.com/jackc/puddle/v2 v2.2.2 h1:PR8nw+E/1w0GLuRFSmiioY6UooMp6KJv0/61nB7icHo=
+github.com/jackc/puddle/v2 v2.2.2/go.mod h1:vriiEXHvEE654aYKXXjOvZM39qJ0q+azkZFrfEOc3H4=
 github.com/julienschmidt/httprouter v1.3.0 h1:U0609e9tgbseu3rBINet9P48AI/D3oJs4dN7jwJOQ1U=
 github.com/julienschmidt/httprouter v1.3.0/go.mod h1:JR6WtHb+2LUe8TCKY3cZOxFyyO8IZAc4RVcycCCAKdM=
+github.com/kelseyhightower/envconfig v1.4.0 h1:Im6hONhd3pLkfDFsbRgu68RDNkGF1r3dvMUtDTo2cv8=
+github.com/kelseyhightower/envconfig v1.4.0/go.mod h1:cccZRl6mQpaq41TPp5QxidR+Sa3axMbJDNb//FQX6Gg=
+github.com/pmezard/go-difflib v1.0.0/go.mod h1:iKH77koFhYxTK1pcRnkKkqfTogsbg7gZNVY4sRDYZ/4=
+github.com/stretchr/objx v0.1.0/go.mod h1:HFkY916IF+rwdDfMAkV7OtwuqBVzrE8GR6GFx+wExME=
+github.com/stretchr/testify v1.3.0/go.mod h1:M5WIy9Dh21IEIfnGCwXGc5bZfKNJtfHm1UVUgZn+9EI=
+github.com/stretchr/testify v1.7.0/go.mod h1:6Fq8oRcR53rry900zMqJjRRixrwX3KX962/h/Wwjteg=
+golang.org/x/crypto v0.37.0 h1:kJNSjF/Xp7kU0iB2Z+9viTPMW4EqqsrywMXLJOOsXSE=
+golang.org/x/crypto v0.37.0/go.mod h1:vg+k43peMZ0pUMhYmVAWysMK35e6ioLh3wB8ZCAfbVc=
+golang.org/x/sync v0.13.0 h1:AauUjRAJ9OSnvULf/ARrrVywoJDy0YS2AwQ98I37610=
+golang.org/x/sync v0.13.0/go.mod h1:1dzgHSNfp02xaA81J2MS99Qcpr2w7fw1gpm99rleRqA=
+golang.org/x/text v0.24.0 h1:dd5Bzh4yt5KYA8f9CJHCP4FB4D51c2c6JvN37xJJkJ0=
+golang.org/x/text v0.24.0/go.mod h1:L8rBsPeo2pSS+xqN0d5u2ikmjtmoJbDBT1b7nHvFCdU=
+gopkg.in/check.v1 v0.0.0-20161208181325-20d25e280405/go.mod h1:Co6ibVJAznAaIkqp8huTwlJQCZ016jof/cbN4VW5Yz0=
+gopkg.in/yaml.v3 v3.0.0-20200313102051-9f266ea9e77c/go.mod h1:K4uyk7z7BCEPqu6E+C64Yfv1cQ7kz7rIZviUmN+EgEM=
diff --git a/internal/config/config.go b/internal/config/config.go
new file mode 100644
index 0000000..17e5b33
--- /dev/null
+++ b/internal/config/config.go
@@ -0,0 +1,16 @@
+package config
+
+import "github.com/kelseyhightower/envconfig"
+
+type ServiceConfig struct {
+	LogLevel    string `default:"INFO"`
+	Port        int    `default:"5002"`
+	DatabaseUri string `envconfig:"DATABASE_URI" required:"true"`
+	Env         string `default:"dev"`
+}
+
+func GetServiceConfig() ServiceConfig {
+	var sc ServiceConfig
+	envconfig.MustProcess("PULLEY", &sc)
+	return sc
+}