A system for damping vibration in a drill string can include a magnetorheological fluid valve assembly having a supply of a magnetorheological fluid, a first member, and a second member capable of moving in relation to first member in response to vibration of the drill bit. The first and second members define a first and a second chamber for holding the fluid. Fluid can flow between the first and second chambers in response to the movement of the second member in relation to the first member. The valve assembly can also include a coil for inducing a magnetic field that alters the resistance of the magnetorheological fluid to flow between the first and second chambers, thereby increasing the damping provided by the valve. A remanent magnetic field is induced in one or more components of the magnetorheological fluid valve during operation that can be used to provide the magnetic field for operating the valve so as to eliminate the need to energize the coils during operation except temporarily when changing the amount of damping required, thereby eliminating the need for a turbine alternator power the magnetorheological fluid valve. A demagnetization cycle can be used to reduce the remanent magnetic field when necessary.