Lactic acid and energy is produced in muscle cells during

aerobic respiration

cellular respiration

anaerobic respiration

cellular division

Anaerobic respiration, specifically lactic acid fermentation. Since there is no oxygen present, neither the electron transport chain nor the Krebs cycle can take place, leaving only glycolysis (an anaerobic process). In order to create more NAD + during lactic acid fermentation, lactic acid is formed as a byproduct. The other form of fermentation is alcohol fermentation when ethanol is produced as a byproduct.