Thanks for all of your interest. some replies and clarification:

There is no white paint, or mold, on the beam in the photo. the bright white area is simply the exposed surface of the pine, where I excavated as much as I could. It may look odd because of the glare from the flash.

the beam is supporting a SIP roof, and an OSB-sheetrock panel wall. it does have bluestain, which was present when I raised it 5 years ago. I would bet a year's salary there is no moisture coming in from the outside the beam now.

I haven't isolated any insects. There have been no ants visible anywhere near here, and I am familiar (way too familiar!) with carpenter ant damage, and this isn't it. The frass is a very fine powder, which is why I thought PPB. The damage is active--I did the excavation because we saw new frass piles on the floor below the beam.

I think it's likely the insect was present at raising, though I cannot swear to it. my concern is about both the structural integrity of this beam, and the possibility of spread to adjacent ones.

any good advice on cutting the beam out? Perhaps I should start a separate thread on that.

thanks, Richard