Learn Spanish (Latin America): La situación es difícil, es decir, muy complicada. - The situation is difficult, that is, very complicated.

Es decir translates to "that is" or "that is to say". It is used to clarify or rephrase what was just said. You could absolutely use o sea here instead! O sea means "in other words" or "I mean". In spoken Latin American Spanish, o sea is extremely common and a bit more casual, while es decir sounds slightly more formal. Both work perfectly to connect these two descriptions.

Why does complicada end in an "a", but difícil doesn't change?

Both adjectives describe la situación, which is a feminine noun (remember that nouns ending in -ción are almost always feminine). The adjective complicado changes to complicada to match the feminine noun. However, adjectives that end in a consonant, like difícil, or in an "e", like interesante, use the exact same form for both masculine and feminine nouns.

Do I always need to use commas around es decir?

Yes, in written Spanish, clarification connectors like es decir and o sea are generally set off by commas, just like the English phrases "that is" or "in other words". When speaking, you will naturally hear a slight pause before and after the phrase.

Are difícil and complicada just exact synonyms in this sentence?