Your  tree has a basal canker. The fungus develops in open wounds infecting the surrounding bark and sapwood. The oozing sap has created an environment where the eggs were laid and developed into the white larva you see. They are not the cause.  There is also the possibility of wood rot developing in the hard wood of the tree. There are no chemical treatments to control the canker or wood rots.
You can keep the keep the area clean and fertilize the tree in the late fall (October November) and reduce any stress with additional irrigation during summer dry periods.
For additional information contact you local Cooperative Extension Service office in Oldham County.